You say

"With your disability pension, I also do not see an issue. If you invested the $100,000 in a term deposit at, say, 5%, that would give you a bit under $100 a week.

But you are allowed to earn up to $102 a week before you lose a dollar of pension. When it comes to assets, you do not lose a dollar of pension until you have above $543,750."

You really need to understand 'deeming' before making assertions such as these. Income from $100k invested isn't counted, it's the deemed income from an asset. This is 4.5%, although much less for the first $50k of all assets.

In this case the deemed income is way below the threshold, but $540k is far above the threshold. You wouldn't lose any pension on the asset test, but definitely would on the income test, as 4.5% of $540k is way over the allowance. So you definitely would lose some pension with $540k, although not with $110k.

https://www.servicesaustralia.gov.au/deeming?context=22526

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Dear John (😆),

YOU have to "really understand 'deeming' before making assertions such as these."

Centrelink, deeming rates (as per Centrelink website) are: "If you're single -

The first $60,400 of your financial assets has the deemed rate of 0.25% applied. Anything over $60,400 is deemed to earn 2.25%."

If you're a coupe the $60,400 is replaced by $100,200 BUT the deemed rate for theses amounts is still 2.25%, NOT 4.5% as you have stated. This is a huge difference! The pension adjustment calculations per the Centrelink income test also involves a 50% reduction rate of income, thereby meaning that $540K financial assets (investment income & 'garage sale price' of owned Assets) for a non homeowner does NOT result in you being "way over the allowance".

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Deeming rates were halved over Covid. You would be foolish to rely on that not reverting to the previous v rates of 0.5% and 4.5% respectively. Indeed, given the current financial climate, it would be prudent to expect an increase from these rates.

It pays to understand the history and context of such things.

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My niece, who is on a disability pension and lives in public housing in Qld. has inherited 50% of her mother's estate. It looks like this could be about $600, 000.00. She does not want to lose her public housing. How can she avoid this?

My niece has a daughter, who is in grade three; however, due to my niece's disability she is unable to bring her daughter up on her own and therefore her daughter lives with a family friend who has paid for the child's education at a high-end private school, as well as most other costs involved with rearing a child. Instead of placing money from the inheritance in a trust for her daughter, which I am assuming would be seen as a gift, is it possible that she pays the friend, taking care of her daughter, the amount of money spent on education etc. as a debt, thus reducing the amount of money she has from her inheritance. Likewise could she pay for her daughter's education in advance (if the school is in agreement) to help reduce her assets so she does not lose her public housing. Any suggestions on how best to not let her inheritance interfere with her eligibility for her public housing and hopefully not reduce her disability pension would be much appreciated.

My niece's disability would make it very difficult to manage owning a home, while at the same time it would be extremely difficult to purchase a home anywhere near where her daughter lives, with the amount she may inherit. Her mental health has improved significantly since she has been living where she is presently, and it is more than likely that to move from the area would be detrimental to her state of mind.

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