There are many rumours and well-intentioned but wrong advice out here on the internet about how to maximise Centrelink or DVA pension by “gifting assets” before applying. I want to clear up some of those misunderstandings

The gifting and deprivation rules prevent you from giving away assets or income over a certain level in order to increase age pension and allowance entitlements. For Centrelink and Department of Veteran’s Affairs (DVA) purposes, gifts made in excess of certain amounts are treated as an asset and subject to the deeming provisions for a period of 5 years from disposal.

Acknowledgement: I relied originally in 2017 on the excellent guidance of the AMP TAPin team for the majority of the content in this article. They write great technical articles for advisors and I try and make them SMSF trustee friendly. I have now updated the article and take responsibility for all data in this latest version.

What is considered a gift for Centrelink purposes?

For the deprivation provisions to apply, it must be shown that a person has destroyed or reduced the value of an asset, their income or a source of income.

A person disposes of an asset or income when they:

• engage in a course of conduct that destroys, disposes of or reduces the value of their assets or income, and
• do not receive adequate financial consideration in exchange.

Adequate financial consideration is accepted when the amount received is reasonably close to the market value of the asset. You may need an independent market valuation to support the value you have used, or Services Australia may use its own resources to value the asset.

Deprivation also applies when the gifted asset doesn’t count under the assets test at all. For example, unless the granny flat provisions apply, deprivation is assessed if a person does not receive adequate financial consideration when they:

buy a new principal home in another person’s name.

transfer the legal title of their principal home to another person, or

What are the gifting limits?

The gifting rules don’t stop you from giving anything to anyone. What they do is cap how much a gift can reduce your assessable assets and income, and so how much it can increase your social security entitlements.

There are two gifting limits, and they apply together:

1. $10,000 per financial year. This is the limit for a single person, or the combined limit for a couple. It is not $10,000 each.
2. $30,000 over a rolling five financial year period.

So you can keep gifting up to $10,000 a year without penalty, but you also need to stay under the $30,000 limit across any rolling five-year window. Neither limit is indexed. They have not changed in more than 20 years and still apply in 2026/27.

What happens if the gifting limits are exceeded?

If you go over either limit, the excess is treated as a “deprived asset” of you and/or your partner.

The deprived amount is then assessed for five years from the date of the gift. It counts under the assets test, and it is deemed to earn income under the income test. The dollar figure stays the same for the whole five years. It doesn’t grow or shrink with the value of whatever you gave away. Once the five years are up, it is no longer counted as your asset and is no longer deemed.

What it costs you in 2026/27. From 20 September 2026, deeming rates are 1.75% on financial assets up to $66,800 for singles ($110,600 combined for pensioner couples) and 3.75% on anything above that. Under the assets test, every $1,000 of assets above the full pension threshold reduces your pension by $78 a year. A $20,000 deprived asset could therefore cost a pensioner on the assets test about $1,560 a year in pension, every year for five years, for money they no longer have.n of the 5 year period, the deprived amount is neither considered to be a person’s asset nor deemed.

Example 1: Single pensioner, gifts not affected by the deprivation rules

Sally is a single pensioner with financial assets of $275,000. She wants to gift some money to her son to help him get ahead. Her gifting plan is:

Financial year	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32
Amount gifted	$6,000	$6,000	$6,000	$6,000	$6,000	$6,000

Neither gifting rule affects Sally. She stays under $10,000 in every financial year, and any rolling five-year window adds up to exactly $30,000 ($6,000 × 5), which is within the limit. No deprived asset is assessed.ear period.

Example 2: Single pensioner, gifts affected by both rules

Peter receives the Age Pension. He gives away the following amounts:

Financial year	Amount gifted	Deprived asset under the $10,000 annual rule	Deprived asset under the $30,000 five-year rule
2026/27	$33,000	$23,000	$0
2027/28	$2,000	$0	$0

In 2026/27, $23,000 of the $33,000 is over the $10,000 annual limit. That $23,000 is treated as Peter’s asset and deemed for five years from the date of the gift.

In 2027/28, Peter has given away $35,000 in total. However, amounts already assessed under the annual rule are taken out before the five-year rule is applied:

$33,000 + $2,000 − $23,000 = $12,000

That’s well under $30,000, so no extra deprived asset is assessed under the five-year rule.

On the cost: if Peter is assessed under the assets test, the $23,000 deprived asset could reduce his pension by about $1,794 a year ($23 × $78) until the five years are up.s totalling $35,000 have been made, no deprived asset is assessed under the five-year rule after taking into account the deprived assets already assessed, ie $33,000 + $2,000 – $23,000 = $12,000, which is less than the relevant limit of $30,000.

Example 3: Couple affected by both rules

Ted and Alice receive the Age Pension. They give away the following amounts:

Financial year	Amount gifted	Deprived asset under the $10,000 annual rule	Deprived asset under the $30,000 five-year rule
2023/24	$10,000	$0	$0
2024/25	$13,000	$3,000	$0
2025/26	$10,000	$0	$0
2026/27	$10,000	$0	$10,000
2027/28	Any gift in 2027/28 is assessed in full as a deprived asset under the five-year rule

Working through it year by year:

• 2024/25: $3,000 of the $13,000 is over the $10,000 annual limit, so it is a deprived asset for five years.
• 2025/26: Gifts counted against the five-year limit are $10,000 + $13,000 + $10,000 − $3,000 = $30,000. That reaches the limit but doesn’t exceed it, so nothing extra is assessed.
• 2026/27: The count is now $10,000 + $13,000 + $10,000 + $10,000 − $3,000 = $40,000, which is $10,000 over the $30,000 limit for the five-year period starting 1 July 2023. Although the 2026/27 gift is within the annual limit, all of it is a deprived asset for five years.
• 2027/28: The five-year window (2023/24 to 2027/28) has no free area left, so any gift this year is assessed in full.

From 1 July 2028, 2023/24 falls out of the window and Ted and Alice will have up to $10,000 of free area available again.ven away in 2021/22 exceeds the gifting limit for that year, so it will continue to be treated as an asset and subject to deeming for five years. The $10,000 given away in 2022/23 exceeds the $30,000 limit for the five-year period commencing on 1 July 2020, so it will also continue to be treated as an asset and subject to deeming for five years.

Are some gifts exempt from the rules?

Certain gifts can be made without triggering the gifting provisions. Broadly speaking, these include:
− Assets transferred between the members of a couple. A common example is where a person who has reached Age Pension age withdraws money from their superannuation and contributes it to a superannuation account in the name of the spouse who has not yet reached age pension age.
− Certain gifts made by a family member or a certain close relative to a Special Disability Trust. For more information on Special Disability Trusts, refer to Department of Human Services – Special Disability Trusts.
− Assets given or construction costs paid for a ‘granny flat’ interest. See Department of Human Services  – Granny Flat Interest for further detail.

Trying to be too smart – Gifting prior to claim

Contrary to what many read on the internet any amounts gifted in the five years prior to accessing the Age Pension or other allowance are subject to the gifting rules

Deprivation provisions do not apply when a person has disposed of an asset within the five years prior to accessing the Age Pension or other allowance but could not reasonably have expected to become qualified for payment. For example, a person qualifies for a social security entitlement after unexpected death of a partner or job loss.

Trying to be too smart – Gifting to a Family Trust

Trying to be too smart: gifting to a family trust

Putting money or assets into a family trust does not get you around the gifting rules.

If you don’t control the trust, the transfer is treated as a gift, the same as giving money directly to a person. The $10,000 and $30,000 limits apply, and any excess is a deprived asset assessed and deemed for five years.

If you do control the trust, the outcome is usually worse. Under the private trust rules, Services Australia can treat you as an “attributable stakeholder” if you or your partner (or your associates) control the trust, for example as trustee, director of the trustee company or appointor, or if you transferred assets into it. The trust’s assets and income are then attributed back to you, often in full, and counted as yours under both tests. This attribution doesn’t end after five years. It continues for as long as you have that control or link.

Gifting and deceased estates

The gifting rules apply to your interest in a deceased estate if you:

• give away your right to your interest in the estate for no or inadequate consideration,
• direct the executor to distribute your interest to someone else for no or inadequate consideration, or
• give your interest to someone else, for no or inadequate consideration, after the estate has been finalised.

These rules apply even if the deceased died without a will.

Gifting and death of a partner

Sometimes a pensioner couple gives away assets and then one of them dies. While both were alive, the deprived assets were assessed against the couple for five years from the date of the gift. So what happens to the surviving partner?

It depends on who legally owned the asset before it was gifted.

Table 1: Gifting and death of a partner

Legal owner of the gifted asset	Deprived asset assessed against the surviving partner
Jointly	Doesn’t change. The survivor keeps their own share, and the deceased partner’s share is not transferred to them.
The deceased partner	Reduces to zero.
The surviving partner	Increases to include the share previously assessed against the deceased partner, so the full outstanding amount is now assessed against the survivor.

Example 4: Death of a partner

Daryl (84) and Gail (78) gifted an apartment worth $260,000 to their son Ethan on 1 July 2025. They had made no other gifts in the previous five years, so after the $10,000 free area Centrelink assessed $250,000 as a deprived asset. As a couple, half of that ($125,000) was held against each of them. Daryl passed away on 1 July 2026, with the deprivation period still running until 1 July 2030.

How Gail is assessed depends on who legally owned the apartment:

Legal owner of the gifted asset	Deprived asset assessed against Gail
Jointly	Gail’s share of $125,000 doesn’t change. Daryl’s $125,000 share isn’t transferred to her, so $125,000 is assessed against Gail.
Daryl	Nothing carries over. The amount assessed against Gail is $0.
Gail	Gail is assessed on the full $250,000, her own $125,000 plus Daryl’s $125,000.

Remember that Gail is now assessed as a single person. That means lower assets test thresholds and a lower deeming threshold ($66,800), so the same deprived amount can have a bigger effect on her pension than it did when she was part of a couple.

A practical tip: keep a gifting log

If you’re a pensioner, or expect to claim within five years, keep a simple record of every gift: the date, the amount, who received it and, for assets, how you valued them. Services Australia asks about gifts in the past five years when you claim, and pensioners must report changes in their circumstances within 14 days. If you lend money to family instead of giving it, put the loan in writing. A documented loan is still your asset (and is deemed), but forgiving it later counts as a gift.

Want a Centrelink Review or are you just looking for an adviser that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Castle Hill or Windsor office in Northwest Sydney to arrange a one on one consultation. Just click the Schedule Now button up on the left to find the appointment options. Do it! make this the year to get organised or it will be 2030 before you know it.

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Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

      

Tel: 02　98993893, Mobile: 0413 936 299

PO Box 6002 Norwest NSW 2153

40/8 Victoria Ave. Castle Hill NSW 2154

Corporate Authorised Representative of Viridian Advisory Pty Ltd ABN 34 605 438 042, AFSL 476223

GENERAL ADVICE WARNING

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

Sources:

• Services Australia – Hank Jongen column: Centrelink’s assessment of gifting
• Services Australia Operational Blueprint – deprivation and death of a partner
• National Seniors – deeming rates media release, 20 Aug 2026
• Savings.com.au – Centrelink payments to rise in September
• Pay Calculator Australia – Deeming rates 2026