Under the assets test, you cannot give an asset away or sell it cheaply to improve your position. Centrelink may consider any assets given away or sold cheaply as 'deprived assets'. The rules covering these cases state that:
- single people or couples can only give away assets of up to $10 000 per year. Amounts greater than this are treated as 'deprived assets'; and
- the value of any 'deprived assets' will continue to be assessed under the assets test for five years after disposal.
Centrelink may also apply a deemed rate of income on the value of the 'deprived assets'. This could affect your payment under the income test as well as the assets test.
A deprived asset only occurs where 'valuable consideration' has not been provided in return for the asset. Valuable consideration does not have to involve a cash sale - Centrelink will accept other payments such as goods (for example, machinery) or services (for example, farm labour) in return for the asset, provided a fair exchange of value is made. The best method of obtaining valuable consideration depends on the individual circumstances. For example, one person may sell an asset for cash, another person may trade the asset for goods (such as machinery or household goods) or services (such as labour or trade services), or transfer the asset to meet a debt repayment.
Prev
Next
Table of Contents
Index
Search Law Topics
