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Balance Retirement & Aged Care Specialists

Can I transfer assets to my children without it affecting my pension entitlement?

Posted on: April 11th, 2023 by Eric Hiam in Aged Care Advice, Aged Care Planning, News, Retirement Village Planning

How can you transfer assets to your family without affecting your pension OR enable you to receive some pension? A Granny flat right might be the answer AND there does NOT need to be any Granny flat built!

Imagine if you needed more support or care, or wanted to be closer to your family BUT were not ready or will not consider a nursing home, then a granny flat right and/or home care might be just what the doctor ordered.

In similar circumstances to buying a Retirement Village, in most cases, you do NOT own the real estate. You are purchasing a “right” to occupy that reals estate. This is the reason you don’t pay stamp duty on most Retirement Villages.

If you were to sell your home and gift the proceeds to your children, Centrelink count the amount you gift (less the 1st $10,000) as a gift (a deprived asset) under the asset test for 5 years and deem it to earn interest for 5 years. This means there is no benefit in gifting it away for your pension entitlement. In fact if not done correctly, it may actually cost you the pension and if you are already in aged care, it may increase your aged care fees.

HOWEVER, if you use the rules of a Granny Flat right to transfer certain assets to your children in return for them giving you the right to live in their home or a home they own or even your own home, then this gets around the “gifting” rules & may entitle you to more pension.

WORD OF CAUTION: Be very careful as there are specific rules & criteria that need to be met. You MUST dot your “I’s” and cross your  “T’s” and check that you satisfy all the rules BEFORE proceeding.

There are different ways of achieving a granny flat right;

  • Giving cash
  • Transferring ownership of your home
  • Purchasing a property in their name

These 3 ways of achieving a granny flat right MIGHT be suitable for you if you are considering your next move. Mind you, there are advantages & disadvantages of each method.

To find out more if a Granny Flat Right is suitable for you, give us a call us on 1300 556 287 for a no obligation free initial chat about what you are trying to achieve. Balance Retirement & Aged Care Specialists are not only experts in Residential Aged Care (Nursing Homes) & Retirement Villages, we can also help you with granny flat rights, home care & pensions.