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Age Pension and Gifting / Deprived assets

Gifting, otherwise known as deprived assets, can impact your age pension and aged care calculations.

Say you give your adult child some money to help them pay their home loan and to get through a tough time. Depending on the amount and period of time, the government may continue to deem that money as part of their calculations for up to 5 years thus impacting your age pension and/or aged care calculations.

It could be helpful to know the rules and limits before you make gifts.


If you gift or receive inadequate consideration for assets worth more than $10,000 in a financial year or more than $30,000 over a 5 financial year period, the value of the asset will be included in the assessable assets and deemed for the Age Pension and Aged Care income caluclations of benefits.

This includes paying a child for running errands but excludes payment for jobs that have comparable market quotes.

This can include directing an inhertiance or superannuation death benefit to be paid to a child instead of receiving it yourself.

If the asset is a farm, there are different rules.


Any amount gifted over these limits will be included in the income test as a deemable asset and the income deemed included in the income test (except annuitites) for the age pension and aged care costs calculations for 5 years from the date of the gift.


Some transactions are excluded from deprivation rules.

Farm assets gifted to family members are exempt from deprivation rules if certain criteria is met. Seek financial advice if this relates to you.

Hardship provisions apply where the recipient is receiving a social security pension or benefit. Talk to your Financial Information Services office at Centrelink for more information if this relates to you.


Mary helps out her daughter with her $2,000 per month for mortgage repayments by drawing down on cash she had in the bank. Over the course of the year this ads up to $24,000. Mary didn't enter into a loan agreement with her daughter. Mary's age pension calculations will include the $14,000 ($24K-$10K deprivation free amount) in the assets for deeming of income for 5 years. This equates to an additional $315 income included in Mary's age pension and aged care calculations.

Joe pays his son $14,000 for painting the house inside and out which was comparable to other quotes received. The full amount is not considered a deprived asset and will not be included in future pension calculations.

Peter (aged 61) decides to give each of his children $50,000 to help them get into the property market once they had saved $50,000. Their eldest John has $60,000 saved so Peter gifts him $50,000 between March and June. Their youngest, Stepanie, has $30,000 saved so doesn't 'qualify' for the gift.

Peter is just over 5 years out from age pension age of 67 and will not have the $50,000 included if it occurs before the end of the financial year and his birthday in June when he turns 62. However, if he waits for Stephanie to save the additional $20,000, Peter will have $40,000 ($50K - $10K) deemed as part of his income calculations.

Presuming Peter's assessable assets is above the threshold of $56,400^, then the $40,000 gift will be deemed at 2.25% pa^ which equates to $900 additional assessable income per annum for 5 years from the gifting date.

The impact on the age pension and aged care calculations will depend on Peter's total assets and income.

Everyone's situation is different and the impact of the gifting rules may be significant or not. Running the numbers before making large gifts can assist you in making informed decisions. Speak to us if you would like assistance in running the numbers.

^ As at 27/03/2023


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