1. Gifting and family agreements
If an elderly person (or couple) is on a pension and they give
more than $10,000 in a year — or more than $30,000 over a
rolling five-year period — their pension will be reduced or
even lost, as any excess will be assessed by Centrelink as a
deprived asset.
“That’s a very powerful thing for an older person (a) to know
and (b) to say to a son or daughter, ‘Well, I might be more
dependent on you if you take that $50,000 from me’ because
it can be seen as a gift,” Patterson said.
2. The other thing to be very careful and aware of are family agreements.
Problems can arise both from having and not having an agreement.
In terms of not having an agreement if, for instance, an adult child
convinces an older relative to sell their house and put the money
towards a new house that is being built, with the promise that the
older relative can live there. If there is not an agreement, the money
can be viewed as a gift and may affect pension entitlements.
Also, if the new house is later sold, the older relative may have no
evidence that they gave the money and could be left without a home
and without the money from the sale.
However, having an agreement may also give rise to adverse tax
implications.