Vital to know the rules of giving
Giving money to children and grandchildren is good for some writes
GIVING money to children and grandchildren is a strategy that’s likely to appear on retirees’ radars more regularly amid planned age pension rule changes.
When pension asset tests tighten from 2017, gifting is one of the few tactics left to lower your assessable assets, but experts warn you need to understand the rules and work out if it’s the right move for you and your retirement savings.
You are allowed to give money and assets to anyone at any time, but if you’re claiming a pension there are limits above which Centrelink will still treat it as an assessable asset for five years from the date you gift it.
“There are two thresholds – a $10,000 limit in a financial year and a rolling limit of $30,000 in a five financial-year period,” says Department of Human Services general manager Hank Jongen.
“The same amounts apply for a couple as for a single person, and the thresholds apply to financial years, not calendar years.” longevity it’s important to make sure you will have enough left for yourself. attitude to retirement than those of 15-20 years ago, focusing more on enjoying their retirement lifestyle. They shouldn’t worry about upsetting the younger generations.
“Most kids generally think ‘it’s your money – you do what you want to do’,” Budreika says.
“If you are intending to gift, look at the longer term impact on what it means.”