|
Post by nigel on Jul 4, 2023 4:51:08 GMT 7
For a variety of reasons, our mother wants to give us part of our inheritance early.
There should be $30-40k available to me if she does.
Will this affect my pension, if it happens?
If not, what I hope to do is invest the money on the asx and use the dividends for overseas travel.
|
|
|
Post by bear on Jul 4, 2023 6:53:53 GMT 7
|
|
|
Post by tasjo on Jul 4, 2023 9:06:43 GMT 7
I believe it would be classed as gifting Nigel - may be worth asking an FISO as there are separate thresholds that I think may be in addition/instead of the asset test in these circumstances.
|
|
|
Post by bear on Jul 4, 2023 11:00:32 GMT 7
|
|
|
Post by scuzzy on Jul 5, 2023 1:39:27 GMT 7
It depends if you're getting paid under the 'Income Test' or the 'Assets Test'. If you're being paid under the 'Income Test' and the 40K doesn't push you over to being paid under the 'Assets Test', then when you invest that in the ASX (or even just stick it in the bank), Centrelink will 'deem' it to be able to earn the 'deeming rate', regardless of how much you are actually earning (or losing) on it. The deeming rate for amounts under $56,400 is 0.25%. That means that regardless of what you do with it or how much interest or profit you are making on it, Centrelink will just apply the deeming rate of income. Then your DSP will reduce accordingly because the 0.25% of 40,000 per year will be considered income. It's only about $100 a year income, so it will barely make any noticeable difference to your DSP rate, if any. However, if you're getting paid under the assets test or if getting the 40K will push you over from the income test to the assets test, then depending on the value of your other assets, the 40K could reduce your DSP rate significantly, or even push you over the limit and make you ineligible for DSP. The point where this starts to happen is when you start to get up into the hundreds of thousands of dollars, usually because you've got an investment property or a large stock market portfolio. If you own the home you live in, once you have assets over $301,750 (if you are single) then your DSP will start to reduce by $3 per fortnight for every $1000 over $301,750 and will cancel once your assets are over $656,500. If you don't own the home you live in, then your DSP will start to reduce by $3 per fortnight for every $1000 you're $543,750 and will cancel when your assets get to $898,500. Here's a link to a couple of up-to-date articles which sums it all up a bit more clearly that the Service Australia info. The articles are for Aged Pension but the same applies for DSP: www.superguide.com.au/in-retirement/age-pension-asset-test-thresholdswww.adviserratings.com.au/news/ask-an-adviser-would-share-trading-gains-affect-the-age-pension/If you do run into trouble with the Assets Test, you could always put it into a Super account where it is exempt from the income and assets tests, but it'll be locked in there until you're 55 (I think that's the earliest age you can access Super, but don't quote me on that). But like the others said, probably best to consult a Centrelink financial advisor given the complex nature of it and the dire consequences if you get it wrong. Just one last thing; I've got relatives that lost a lot of money on the stock market, mostly by getting carried away. So make sure you invest carefully and wisely; I've seen cases where it turns into glorified gambling.
|
|
|
Post by tasjo on Jul 5, 2023 5:27:31 GMT 7
Just as a side note regarding Super...
I'm not sure if it applies to anyone on Centrelink payments or if it still exists but there used to be the ability to withdraw prior to 58yrs old up to $10k.
The other thing would be to apply for permanent incapacity if you are on DSP and no longer working. This changes your super to the same as if you had reached preservation age (I believe it's 58 now) and allows you to withdraw it - but again, please speak to a financial advisor.
|
|
|
Post by Banjo on Jul 6, 2023 6:47:30 GMT 7
From The Age How much can I gift my children while on the pension?My sons need assistance because of a large legal debt incurred when a will was contested. How much can I gift them? I am on a single-part pension.
For pension purposes, you are allowed to give a total of $10,000 every financial year with a total of $30,000 over five years. Gifts exceeding that will be counted as an asset and subject to deeming under the income test for five years from the date of the gift. After five years they would cease to exist for Centrelink purposes. Just understand the difference between a loan and a gift – if you make a loan it will stay for Centrelink purposes as long as it exists, but if it was a gift exceeding the limits it will vanish for Centrelink purposes in five years. Disposing of money in either way should not have an immediate adverse effect on your pension because Centrelink will assume your financial position is unchanged. Therefore, your pension will be unchanged but the assets you have as your own personal financial resources will be depleted by the amount of that gift. www.theage.com.au/money/super-and-retirement/how-much-can-i-gift-my-children-while-on-the-pension-20230704-p5dlk5.html
|
|
|
Post by nigel on Jul 10, 2023 6:30:20 GMT 7
Thanks guys! Didn't know there was such a thing as a Financial Services Officer. Managed to speak with one this morning and he confirmed it didn't affect my pension, so I guess I can give it the green light.
|
|
|
Post by Banjo on Jul 10, 2023 6:49:17 GMT 7
Thanks guys! Didn't know there was such a thing as a Financial Services Officer. Managed to speak with one this morning and he confirmed it didn't affect my pension, so I guess I can give it the green light. Thanks for the feedback!
|
|
|
Post by nigel on Jul 18, 2023 20:22:36 GMT 7
Ok. Got the money. Reported it at mygov. Next day, the Centrelink section of mygov wants me to report the value of "Home contents, personal effects, vehicles and other assets". It's pretty vague on what I'm supposed to report, but I assume it wants an estimate of the value of all the assorted items in my rented flat. It says somewhere on the page that I have until the end of the month to do so. It doesn't say what will happen if I don't. I did some googling, of course, and the guide to DSS law says guides.dss.gov.au/social-security-guide/4/6/5/10#:~:text=A%20person's%20and%20their%20partner's%20personal%20effects%20and%20household%20contents,person%20advises%20a%20different%20amount. Is that the only consequence? I haven't compiled an inventory of all my personal belongings that I think would be worth something at a garage sale, so I have no idea if it'd be worth that much or not. But if I'm a bit hesitant to try, because I'm worried that if I put something on that list they find dubious for some reason, that they might make me jump through further hoops (provide receipts, or professional evaluations or something). So would I be better off just letting the deadline pass?
|
|
|
Post by bear on Jul 18, 2023 22:21:31 GMT 7
Wouldn't you already have the value of your assets listed with myGov nigel ? If so I'd probably leave things as they are. I think that if you go through the process, at the end of it all, it'll say your new details will be reviewed and you'll be contacted if it's required. That's my memory of changing things around on myGov i.e. reassessing; as in lowering vehicle values to next to nothing after about ten years, and they've never contacted me. Cheers 🐻
|
|
|
Post by scuzzy on Jul 18, 2023 22:50:06 GMT 7
Ok. Got the money. Reported it at mygov. Next day, the Centrelink section of mygov wants me to report the value of "Home contents, personal effects, vehicles and other assets". It's pretty vague on what I'm supposed to report, but I assume it wants an estimate of the value of all the assorted items in my rented flat. It says somewhere on the page that I have until the end of the month to do so. It doesn't say what will happen if I don't. I did some googling, of course, and the guide to DSS law says guides.dss.gov.au/social-security-guide/4/6/5/10#:~:text=A%20person's%20and%20their%20partner's%20personal%20effects%20and%20household%20contents,person%20advises%20a%20different%20amount. Is that the only consequence? I haven't compiled an inventory of all my personal belongings that I think would be worth something at a garage sale, so I have no idea if it'd be worth that much or not. But if I'm a bit hesitant to try, because I'm worried that if I put something on that list they find dubious for some reason, that they might make me jump through further hoops (provide receipts, or professional evaluations or something). So would I be better off just letting the deadline pass? Second hand household goods are virtually worthless these days, including TV's, computers and other appliances.The last time I updated my income and assets, they didn't want an inventory of my household goods, just a total value of all. The advice to me a little while ago was that unless you have some high value artworks on the wall etc, the value of your household goods is what they'd be worth at a garage sale. In other words, the whole lot would be in the hundreds of dollars, not thousands. Same goes for cars. Unless it's something high-end, it's wreckers yard value because you may unknowingly be a couple of kilometres away from engine/ transmission failure etc which makes a second hand car worthless.
|
|
|
Post by nigel on Jul 30, 2023 18:57:05 GMT 7
Ok. I procrastinated about this.
I was given until 31 July to "home contents, personal effects, vehicles and other assets" or my changes would be "discarded". I did try contacting Centrelink three times on Friday, but just couldn't get through.
So tonight, I decided to try doing it without really knowing what it was about. I estimated the total value of my home contents to be about $5k. I stated that on the Centrelink website. It asked for the date I acquired this asset, so not being sure, I entered the date I first moved into my current home, about 20 years back.
Now it's asking me to upload documented proof of this, by 27 August or may payment will be suspended.
Should I try calling them again first thing in the morning? How should I explain it to them?
|
|
|
Post by nomadic on Jul 30, 2023 20:02:44 GMT 7
first of all GROWL. GGGGGRRRRROOOOOWWWWWLLLLL. Defies all human belief......AGAIN! Haven't you still got the receipt for that $5.00 T-shirt you brought from St Vinnies in 2003? Shame on you.
|
|
|
Post by itsmylife08 on Jul 30, 2023 20:25:51 GMT 7
first of all GROWL. GROWL. Defies all human belief......AGAIN! Haven't you still got the receipt for that $5.00 T-shirt you brought from St Vinnies in 2003? Shame on you. It does defy all logic nomadic, to put a different perspective on it. (Tell the bastards nothing) Cheers Itsa
|
|