‘If I give my inheritance to my sons and nephews, will it impact my pension?’

Mar 22, 2021
Make sure you take expert advice before any action. Source: Getty

Q. I am 62 years old and employed full-time. I have just received an inheritance but intend to divide it between my four nephews and two sons. But I am looking at retirement in the next couple of years, and the cash component of the inheritance I give them will definitely be over the $30,000-over-five-years limit that’s set by Centrelink for gifting. How will this impact my super or Age Pension?

A. The gifting provisions for pension purposes allow gifts of $10,000 a year, with a maximum of $30,000 to be gifted over five years. For a person born after January 1, 1957, the pensionable age is 67, so based on the information given regarding your current age, you will have to wait five years before becoming eligible for the Age Pension. Therefore, if you give the whole lot of the money away now, it should cease to be counted for Centrelink purposes in five years – theoretically in time for you to apply for the pension without impact.

. I am 63 and was wondering: if I spend most of my superannuation, will I still qualify for the Age Pension at 67 years of age?

A. Provided you spend the money on things such as travel and renovations to the home, or even changing houses, it will not be taken into account by Centrelink. However, if you give money away or make loans, that may be an issue. So, make sure you take expert advice before any action!

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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