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Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

A person who is eligible for Centrelink or Veterans’ Affairs (DVA) payments is expected to use their own financial resources to support themself so the ability to gift to others without an impact on entitlements may be limited.

Centrelink/DVA entitlements are based on two tests – an income test and an assets test. Gifts can reduce assets (and also the assessed income) and may help to increase the amount of Centrelink/DVA payment.

A single person or couple combined is allowed to gift $10,000 per financial year, with a limit up to $30,000 over a five year rolling period. If more than this amount is gifted the excess amount is called a ‘deprived asset’.

A deprived asset is counted as an assessable asset under the assets test and is subject to deeming under the income test for five years from the date of the gift. This may affect your Centrelink/DVA payment.

When looking at the $30,000 limit, Centrelink will also take into consideration amounts gifted in the previous five years.

Before making the gift it is important for the person to ensure they can afford to do this and that they have enough money to meet their own needs. The amount given away may be more than the additional payment received from Centrelink/DVA. The motivation needs to be to help someone financially, not just increase Centrelink/DVA benefits.

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

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