It’s that time of year when people start thinking about gifting. We are not talking about socks, perfume or movie tickets, we’re talking about gifting a significant amount of money or assets – enough it would impact your pension or aged care costs. Before you gift, here’s what you should consider.

If you receive a means-tested pension such as the age pension, or you (or your partner) are receiving aged care then if you make (or receive) a gift you will need to disclose it to Services Australia. Whether you are a single or a couple, the allowable gifting amount is $10,000 in a financial year and $30,000 in five financial years.

Early inheritances are well and good, but make sure you don’t regret gifting away money you might have actually needed.Credit: Simon Letch

Gifts above the allowed amounts are considered a “deprived asset” which are counted as assets and deemed to earn income for pension and aged care, just like they are in your investments, for five years.........

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