What are gift­ing lim­its?

The Coffs Coast Advocate - - NEWS - SHANE GOURLEY

THE gift­ing rules ap­plied by Cen­tre­link for ben­e­fit pay­ments do not pre­vent a per­son from mak­ing a gift to an­other per­son.

Rather, they cap the amount by which a gift will re­duce a per­son’s as­sess­able in­come and as­sets for means test­ing pur­poses.

There are two gift­ing lim­its which ap­ply to a sin­gle per­son or to the com­bined amounts gifted by a cou­ple:

Up to $10,000 each fi­nan­cial year, and

A limit of $30,000 over a five fi­nan­cial year rolling pe­riod.

The $10,000 and $30,000 lim­its ap­ply to­gether. Although peo­ple can con­tinue to gift as­sets of up to $10,000 per fi­nan­cial year with­out penalty, they need to take care not to ex­ceed the gift­ing free limit of $30,000 in a rolling five-year pe­riod.

Ex­am­ple : Ken, a sin­gle pen­sioner would like to fi­nan­cially help his adult daugh­ter and grand­son.

His plan for gift­ing is $5000 each year for four con­sec­u­tive fi­nan­cial years.

With this gift­ing plan, Ken has not ex­ceeded ei­ther gift­ing rule.

This is be­cause he has kept un­der the $10,000 in a sin­gle year rule and also within the $30,000 per rolling five-year pe­riod.

In fact, Ken could have gifted $6,000 per fi­nan­cial year over this five year pe­riod and not be caught un­der ei­ther rule.

This re­sults in his as­sess­able fi­nan­cial as­sets fall­ing by $5000 per an­num or $25,000 over the five-year pe­riod, which may also in­crease his Cen­tre­link en­ti­tle­ments.

PHOTO: DAIZUOXIN

COV­ER­ING OFF: Rules that ap­ply to gift­ing ap­plied by Cen­tre­link.

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