If she is moving in with your sister she should also look at a Granny Flat Interest to guarantee her life tenancy.. A good adviser can walk you through a number of strategies to achieve sine if not all her wishes. See more details here https://www.servicesaustralia.gov.au/granny-flat-interest?context=22526

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Kind mum needs to look after herself first. Setting up comfortable and stable accommodation after her house is sold with a paced income from the proceedings should be her priority.

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I've noticed many financial advisors state that Centrelink rules only allow gifts of $10,000 per financial year with a maximum of $30,000 over a five year period. And then the dreaded "deprivation provisions" are thrown in like an overarching threat.

And, I know they're simply repeating the Centrelink mantra, but at best, this information is simplistic; at worst, it is simply misleading.

Since I don't know Tanya's mother's complete financial situation, let me provide a simple example which shows you can gift whatever you want with virtually no impact on your pension:

Fred is an income tested aged pensioner with $800,000 in shares, bank accounts and fixed term deposits; all currently subject to deeming at 0.25% and 2.25%.

Fred gifts $100,00 to his favorite niece. Centrelink allows $10,000 as a gift and applies the deeming rate to the balance of the gift: ie, $90,000.

So, what's happened to Fred's pension?

Essentially nothing!

He's given the gift to his niece.

He's suffered no penalty from Centrelink for excessive gifting.

He's actually had a very small increase in his pension. (Financial assets reduced by $10,000.)

And, in 5 years' time the remaining $90,000 of his gift will be removed from his income test altogether; at which point he'll receive a substantial increase in his pension!

There are probably 10's of thousands of pensioners like Fred who'd like to help family members with mortgages and cost of living pressures, but they're tricked into thinking they're not allowed to do that.

I'd like to see better information given to your readers so they can make these types of gifting decisions with the full knowledge of the minimal impact their actions will actually have on their pensions.

Regards

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Michael Crowe your example is nonsense. If old mate Fred has 800k in shares he isn't getting any aged pension as he is well over the assets test. Centrelink apply the test that pays someone the least pension under each test. This is why we don't recommend getting financial advice from the nuff nuff next door. Stick to your day job which I'm sure isn't in financial advice (I hope).

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Well, thanks George for pointing out my "typo". I meant to say old Fred had $500,00. In any event, the point I was making was that people should not think they can only give away the $10,000 per year Centrelink suggest.

Rather than focusing on the message, you went straight for the one detail which was incorrect: my typo.

I'll make sure I proof read my comments more closely in future so as not to incur your wrath.

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Thanks Michael for pointing out what is misleadingly reinforced by most people.

Centrelink do not STOP you giving away what ever you want, they simply apply a deeming rate to it which is more than fair. If people used a little common sense they would realise that provided their expected life span is greater than 5 years they could end up better off giving away as much as possible as early as possible.

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I have $ 350.000 in super and just retired with total asset within limit for couples & my wife is out of work due to medical reason and gets job search . allowance and now I am thinking of transferring super to account based pension. As per sweetspots figure I am eligible for full age pension. My question is when I shall draw 5% from account based pension , is Centrelink going to reduce from my eligible full age pension amount? Where and how can I get a very clear and correct information please

Regards

Sam

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