What are the Age Pension gifting rules?

Gifting some of your assets or retirement savings to assist family, friends or worthy causes can be an excellent way to aid younger members of your social circle or society at large.

Planning is key, however, if you wish to avoid unintended financial consequences.

No matter how well intentioned, gifting may positively or negatively impact your Age Pension entitlements because your gift may still count towards your income and assets tests. This also applies if you sell them for less than they’re worth.

What is gifting?

For Centrelink purposes, gifting refers to selling or transferring income or an asset for less than its value or without receiving anything in return. If you receive adequate compensation, it is not considered a gift. 

Gifting limits

While you can give away as much you like, there are limits (gifting free area or thresholds) within which a gift wouldn’t affect your Age Pension benefit.

1. A person or a couple can dispose of assets of up to $10,000 each financial year. This $10,000 limit applies to a single person or to the combined amounts gifted by a couple, and
2. An additional disposal limit of $30,000 over five financial years.

The $10,000 and $30,000 limits apply together meaning that assets can be gifted up to $10,000 per financial year without penalty but gifts must not exceed $30,000 in a rolling five-year period.

If you exceed these limits, the amounts gifted outside these limits will result in being treated as a ‘deprived asset’ which will be counted as an asset under the assets test and deemed under the income test.

These deprivation provisions are designed to limit the potential for someone to reduce their assets for the purpose of increasing their Age Pension.

Deprived assets are assessed for five years from the date of the relevant disposal and are subject to deeming during that time. When applying for Centrelink/Department of Veteran Affairs (DVA) payments, you must disclose gifts made in the last five years and report any gifts, sales or transfers within 14 days after your application is approved.

What counts as gifting?