A grieving 96-year-old woman has revealed how she’s had thousands stripped away from her pension after inheriting $200,000 from her late sister – all due to strict Centrelink rules.
Aussie woman Connie inherited her sister Edna’s fortune when she passed away in 2012 but, despite attempting to gift some of that away to charities in the years since, she revealed in an interview with The West Australian that she’s lost around $15,788.75 of her pension in just over a year.
“I’m really furious with the way you’re treated when you’re too old for them to be bothered,” the retired nurse told the news outlet. “It is terribly cruel.”
After receiving the inheritance, Connie fell foul of Centrelink’s assets test and subsequently lost around $300 of her fortnightly pension amount.
While the test previously wiped $15 off someone’s fortnightly pension for every $10,000 that exceeds the assets test, that figure was then doubled in 2017 – meaning pensioners can now lose $780 each year for every $10,000 of assets affected.
It prompted Connie to give away $150,000 of her money to charities close to her heart, including Silver Chain, Salvation Army, Fred Hollows Foundation, Smith Family and World Vision.
While it would have taken her out of the assets test zone, it meant she then fell foul of Centrelink’s gifting and deprivation rules. The strict rules only allow you to gift $10,000 a year, or a maximum of $30,000 over a five-year period.
If those rules are breached, the excess amount (over the gifting limit) is then considered to be a deprived asset and therefore subject to the assets test.
According to the news outlet, Connie has now lost $15,788.75 of her pension from February 2017 through to June this year – and will likely continue to lose more than $200 a fortnight until February 2022.
Sharing her anger that she’s been penalised for trying to help charities, she told the news outlet: “If I’d gambled it away, I’d be OK.”
Centrelink’s assets test classes any savings that you might have in a bank account, along with term deposits or any loans you may have, as a financial investment – meaning those amounts are included when working out the sum total of your assets.
For those on the full rate of pension who are single and own their own home, the assets limit is $258,500, meaning that anything over that amount will impact upon their payments. While single recipients who do not own a property can amass up to $465,500 in assets before seeing a detrimental effect on their fortnightly pension payments.
Meanwhile, under the gifting or deprivation rules, Centrelink allows you to reduce your assets by $10,000 a year through gifting, with a maximum of $30,000 over a five-year period.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.