You can give money or assets to family, friends or charities while receiving the Age Pension, but there are limits on how much you can give away without affecting your pension.
You can generally give away up to $10,000 in a financial year and up to $30,000 over five financial years in a row without the gift affecting your Age Pension. Amounts above these limits can continue to be counted under both the Assets test and Income test for five years.
The gifting limits don’t restrict how much you can give away. They determine how much you can give away before the excess continues to count in your Age Pension means tests.
| Gifting limit in one financial year | $10,000 |
| Gifting limit over five financial years | $30,000 |
| Limit for a couple | The same limits apply to the couple combined |
| How long an excess gift generally remains assessable | Five years from the date of the gift |
Justin Bott, Community Information Officer at Services Australia, spoke to SuperGuide about how these rules work in practice. His comments appear throughout this guide.
What counts as a gift?
For Age Pension purposes, gifting is not limited to giving someone cash. A gift can include money, assets or income that you:
- give away without receiving anything in return
- sell or transfer for less than its market value
- give up or dispose of without receiving adequate financial consideration in return.
For example, if you give your daughter $20,000, the $20,000 is a gift. If you sell your son a car with a market value of $20,000 for $10,000, the difference of $10,000 is treated as a gift.
Other examples can include forgiving a debt someone owes you or paying someone else’s debt without receiving anything of equivalent value in return.
Lending money is different from giving it away. If you make a genuine loan that is expected to be repaid, the amount you are owed generally remains an assessable financial asset and is subject to deeming. If you later forgive the loan, the amount you forgive may be treated as a gift.
How much can I give away?
You can generally give away:
- up to $10,000 in one financial year, and
- no more than $30,000 over five financial years in a row.
These limits are known as the allowable disposal amount or gifting free area.
The limits are the same whether you are single or part of a couple. A couple does not receive a separate $10,000 annual limit for each partner. The $10,000 annual and $30,000 five-year limits apply to the couple combined.
How does the five-year gifting limit work?
The $30,000 limit applies over five financial years in a row. You need to consider how much you have given away in the current financial year and the previous four financial years.
For example, suppose you give your children:
- $10,000 in 2026–27
- $10,000 in 2027–28
- $10,000 in 2028–29.
You have now given away $30,000 within the five-year period. Although you have not exceeded the $10,000 annual limit in any year, you have used the full five-year gifting allowance.
If you then give away another $10,000 in 2029–30, the additional $10,000 would generally be treated as a deprived asset because you have already used your $30,000 allowance for the five-financial-year period.
Because the annual limit applies by financial year, you could give $10,000 in June and another $10,000 in July without exceeding the $10,000 limit in either financial year. However, you would have used $20,000 of your $30,000 allowance over five financial years.
What happens if I give away more than the limits?
Giving away more than the allowable amount does not mean you cannot make the gift. However, the excess amount generally continues to be treated as though you still own it for Age Pension means testing.
“There is actually no law that stops anybody from gifting anything to anybody. It’s just that we won’t necessarily recognise that you don’t have that money any longer. Anything you give over those amounts, we’re going to treat as if it’s sitting in a bank account, for five years from the date you gave it away.”
Justin Bott, Services Australia
The excess is known as a deprived asset. Services Australia generally:
- continues to include the excess amount in your assessable assets under the Assets test, and
- applies the deeming rules to the excess amount, with the resulting deemed income included under the Income test.
This means giving away assets does not necessarily improve your Age Pension entitlement, even though you no longer own or have access to the money or asset.
How long does an excess gift affect my Age Pension?
An amount above the gifting limits is generally treated as a deprived asset for five years from the date of the gift.
During that period, the excess amount can continue to be included in your Assets test and have deemed income applied under the Income test.
For example, suppose you have not made any other gifts and give your daughter $25,000 in one financial year. The first $10,000 is within the annual gifting limit, but the remaining $15,000 is above it.
That $15,000 would generally continue to be counted as an asset for five years from the date of the gift, with deeming also applied to it during that period.
Can I give money away before applying for the Age Pension?
The gifting rules can apply before you start receiving the Age Pension. Giving money or assets away shortly before you claim the pension does not necessarily remove them from the means tests.
When you claim the Age Pension, Services Australia can take into account gifts made during the five years before your claim. Any amount that exceeded the gifting limits and is still within its five-year deprivation period may be included in your assessable assets and subject to deeming.
This is important if you are approaching Age Pension age and considering giving a significant amount of money or property to your children or other family members.
What doesn’t count as gifting?
Spending money on yourself in return for goods or services of reasonable value does not generally count as gifting. The gifting rules are generally concerned with disposing of assets or income without receiving adequate value in return.
For example, using your savings to pay for the following would not generally be considered gifting:
- normal living expenses
- a holiday
- a car for your own use
- repairs, renovations or improvements to your principal home
- goods or services for which you receive reasonable value.
Although this spending may reduce the value of your assessable assets, other Age Pension rules can still affect how what you buy is assessed. For example, your principal home is generally exempt from the Assets test, while a car you own is an assessable asset.
Do gifts to children or grandchildren count?
Yes. There is no separate gifting exemption for money or assets you give to your children, grandchildren or other family members.
For example, money you give a child to help with a home deposit, mortgage, wedding or other expenses will generally count towards your gifting limits if you do not receive adequate value in return.
The same applies if you transfer an asset to a family member for less than its market value. The difference between the market value and what you receive will generally be treated as a gift.
Do donations to charities count as gifts?
Donations to charities, churches and other organisations generally count towards your gifting limits, just like gifts to family or friends.
If your total gifts remain within the $10,000 annual and $30,000 five-year limits, they will generally not affect your Age Pension under the gifting rules. Amounts above the limits may be treated as deprived assets.
What if I transfer my home or other property?
Transferring property can have significant Age Pension consequences because Services Australia will generally consider whether you received adequate value in return.
For example, simply transferring your home to a child for nothing or for less than its market value can result in some or all of the value transferred being treated as a gift.
Different rules can apply if you transfer money or property in return for a lifetime right to live in a property. These arrangements can come under the granny flat interest rules rather than the ordinary gifting rules.
There are also special rules for some transfers to special disability trusts. Because property transfers and these other arrangements can involve separate social security rules, it is important to check how they will be treated before going ahead.
When do I need to tell Services Australia about a gift?
If you receive the Age Pension, you should tell Services Australia about gifts you make as part of keeping your income and asset information up to date. Changes to your circumstances generally need to be reported within 14 days.
Bott says this includes small, irregular gifts, even when each gift is well below the gifting limits.
“What if I help my daughter out with rent every now and then? It’s $200 here, $500 there. It’s not regular, and it’s under the $10,000 in a financial year. Even though it’s small and under those limits, it’s still something you need to let Services Australia know about, because by itself it might not do anything, but added to other changes it can have an impact in the future.”
Justin Bott, Services Australia
You can update your details through your Centrelink online account linked to myGov or by contacting Services Australia.
Keep records of your gifts, including the date, amount and who received the money or asset. If you transfer an asset for less than market value, it is also useful to have evidence of its market value at the time.
Summary
You can generally give away up to $10,000 in a financial year and no more than $30,000 over five financial years in a row without the gift affecting your Age Pension under the gifting rules. The same limits apply to a single person and to a couple combined.
If you exceed either limit, the excess amount can generally continue to be counted as an asset for five years from the date of the gift, with deeming also applied under the Income test.
The rules can also apply to gifts made before you claim the Age Pension, so giving money or property away does not necessarily remove it from your Age Pension means tests.
The information in this article is general in nature.