What gifts we include in income and assets tests
We may include your gift if you give away, sell or transfer it for less than its market value.
We may not include a gift if you’re applying for a payment for the first time. You’ll need to show that you didn’t expect a payment from us when you made the gift.
For example, you gave away your car. Then you got sick and need to claim JobSeeker Payment. We’ll assess these situations on a case-by-case basis.
We won’t consider it to be gifting if you or your partner are either:
- selling or reducing your assets to meet normal costs
- selling or transferring an income or asset in return for adequate consideration.
Examples of normal costs include buying a fridge, a holiday or home improvements.
An example of adequate consideration is Jim selling his motorbike for $6,300 on the open market. A sales website says the value of the motorbike could be $6,500. It’s adequate consideration because $6,300 was Jim’s best offer.
If you sell a house
We may include a gifted amount in your income and assets tests. For example, you own a property worth $380,000. But you sell it to your child for $200,000.
We would assess the $170,000 difference as a gift. We wouldn’t include $10,000 in your tests. This is because you can gift up to $10,000 in a financial year. You can’t gift more than $30,000 in a five year period without affecting your payments from us. It’s known as your allowable disposable amount.
In some cases, we won’t include it in your income and assets tests. For example, you own a house valued at $380,000. You sell it for $350,000 on the open market. This is because it was the best offer to date. You didn’t think it was a good idea to wait for a higher offer.
If you buy or transfer a car
We may include a car in your tests if you buy it for your child as a present.
We won’t include a car if both of these apply:
- you have a debt that you can’t repay
- you transfer a car worth about the same amount to wipe out the debt.
If you transfer money into a trust or company
We may include it in your tests if you put money into a family trust or private company. This applies if you don’t control the trust or company. It also applies if your partner puts money into a trust or company that they don’t control.
We won’t include it if both of the following apply:
- you put money into a family trust or company
- you or your partner control that trust.
If you give up control of a trust or company
We may include it in your income and assets tests if you give up control of a trust or company. For example, you transfer shares or units in a company or unit trust but don’t get full market value for them.
If you forgive a loan
We may include it in your tests if you forgive a loan owed to you.
If you pay off someone else’s loan
We may include it in your tests if you have to repay your child’s business loan because you guaranteed it.
If you donate money
We may include it in your tests if you donate to a church or charitable organisation. For example, if you donate 10% of your wages to your church.
If you have deprived income
Deprived income is where both of the following apply:
- you give away or refuse an increase in your income
- you don’t get adequate consideration in return.
We include this amount in your income test and can keep doing so forever.
For example, Frank gets a superannuation pension of $6,000 per year. He refuses an increase of $1,000 per year because he doesn’t want his Age Pension to go down. We call this deprived income.
We include the $1,000 in Frank’s income test for Age Pension each year. This means Frank’s payment from us will be at a lower rate. We can include the $1,000 in Frank’s income test indefinitely.
Page last updated: 20 March 2020
This information was printed 6 July 2020 from https://www.servicesaustralia.gov.au/individuals/topics/non-medical-rules-disability-support-pension/51251/income-and-assets-tests/assets/gifting/what-gifts-we-include-income-and-assets-tests. It may not include all of the relevant information on this topic. Please consider any relevant site notices at https://www.servicesaustralia.gov.au/individuals/site-notices when using this material.