Can I gift assets to reduce my assets for the Age Pension assets test?

You can — but only up to the gifting limits. Excess gifts are treated as a deprived asset for 5 years, so they continue to count under the assets test AND are deemed to earn income, exactly as if you still owned them. Gifting larger amounts is sometimes still worthwhile when the asset is genuinely surplus to your needs — see the planning section below.

Centrelink Gifting Rules: What You Can Give Away Without Losing Your Pension | RetirementCalculators.com.au

retirementcalculators.com.au/age-pension/assets-test/gifting-rules/

Centrelink Gifting Rules: What You Can (and Can't) Give Away

Q: How much can I gift my children before it affects my Age Pension?

You can gift up to $10,000 in a single financial year and no more than $30,000 over any rolling five-year period without it affecting your Age Pension. Both limits apply simultaneously. Amounts above these limits are treated as deprived assets and counted against you for 5 years from the date of each gift.

Q: Does the $10,000 limit apply to each person in a couple?

No. The $10,000 annual limit and $30,000 five-year limit apply to a couple combined, not per person. A couple together shares a single $10,000 annual limit and a single $30,000 five-year limit. This is a very common misconception.

Q: Do I have to tell Centrelink if I give my children money?

Yes. You must report any gift to Centrelink within 14 days, even if the gift is within the allowable limits. Failing to report gifts is a compliance breach and can result in debts, penalties, and overpayment recovery action.

Q: Can I give money to my children before I apply for the Age Pension?

Yes — but Centrelink looks at gifts made up to 5 years before your claim. Gifts made within that 5-year window are still subject to the gifting rules. Gifts made earlier than 5 years before your claim are not counted. This is why people who plan early often have more flexibility.

Q: Is forgiving a loan to my child counted as a gift?

Yes. If you have lent money to a family member and later forgive part or all of the debt, the forgiven amount is treated as a gift on the date of forgiveness. Until forgiveness, the loan is still your asset and is deemed to earn income.

You want to help your kids or grandkids — maybe a deposit for their first home, money toward a wedding, or just a meaningful early inheritance while you're still around to see them enjoy it. But you've heard Centrelink has rules. Are you about to lose your pension if you're generous? Let's clear it up. The rules are real but they're not as scary as the rumours suggest, and good planning makes most of the worry disappear.

The two limits at a glance

Annual gift limit

$10,000

Maximum you can gift per financial year (1 July to 30 June) without it affecting your pension.

Five-year rolling limit

$30,000

Maximum you can gift over any rolling 5-year period without it affecting your pension.

💡 The core rule, plain English

You can give away up to $10,000 in any single financial year, and up to $30,000 across any rolling 5-year period. Both limits apply at the same time — Centrelink checks both whenever you make a new gift. Anything above either limit is treated as a "deprived asset" and counted against you for 5 years from the date of that specific gift, even if the money is long gone.

Important: "year" here means the Australian financial year (1 July to 30 June), not calendar year and not 12 months from your last gift. This matters a lot — see the timing tip further down.

What counts as a "gift" in Centrelink's eyes?

The technical name for Centrelink's gifting rules is the deprivation rules. They apply whenever you dispose of an asset for less than its market value. That covers a lot more than just handing over cash:

Cash gifts to family members or friends
Transferring property or shares for less than market value (or for nothing)
Forgiving a loan that someone owed you (the forgiven amount is a gift on the day you forgive it)
Selling an asset for significantly less than what it's actually worth — for example, selling a $40,000 caravan to your son for $5,000
Setting up a trust that you no longer control or benefit from
Regularly paying someone else's bills or expenses on their behalf (occasional small payments are fine; a pattern is different)
Donations to charity — yes, large charitable donations count just like any other gift

COMMON MISCONCEPTION

⚠️ The limits apply to a couple JOINTLY — not to each partner separately

You may have read elsewhere that "each person in a couple has their own $10,000 limit, so together you can gift $20,000 a year." This is wrong. A couple shares a single combined limit: $10,000 per financial year and $30,000 over five years — regardless of which partner makes the gift or whose name the asset was in.

This catches a lot of people out. If you've been operating on the assumption that you and your spouse have separate limits, it's worth checking what you've already gifted in the last 5 years and whether Centrelink has been notified.

What does NOT count as gifting

Centrelink's gifting rules don't catch every transfer of money or assets. The following are explicitly NOT gifts in Centrelink's eyes:

✓ Six things that are NOT gifts

Transfers between spouses. Centrelink treats a couple as a single financial unit, so money moving between your and your spouse's accounts isn't gifting — even substantial transfers. One particularly useful application: if one partner is Age Pension age and the other isn't, the older partner can contribute to the younger partner's accumulation-phase super, which removes those funds from the assets test entirely. See our Mixed-Age Couple Calculator to model the impact.
Selling assets at fair market value. A sale at genuine market value isn't a gift, even when the buyer is a family member. Get an independent valuation if you want to be on safe ground.
Spending on yourself. Holidays, living expenses, replacing your car, renovating your home — money you consume is not money you've gifted.
Genuine documented loans. A loan with proper paperwork stays your asset until repaid or forgiven (and is deemed under the income test in the meantime).
Granny flat interests that are correctly structured fall under their own assessment rules, not the gifting rules. See our Granny Flat Interests guide.
Special Disability Trust contributions by close relatives can qualify for specific exemptions up to legislated limits.

ℹ️ Other rules can still apply

The list above covers Centrelink only. Other tax and legal rules — capital gains tax, stamp duty, bankruptcy clawback, family law — may still apply to some transfers, particularly anything involving property. Get advice before any significant transaction.

How the two limits work together

Centrelink runs two tests on every gift you make. Both have to be passed for the gift to escape the rules:

Test	What it checks	What happens if it fails
Rule 1 Annual	Total gifts in this financial year	Anything above $10,000 in a single financial year is a deprived asset for 5 years from the date of the gift.
Rule 2 5-year rolling	Total gifts in this financial year plus the previous 4 financial years, minus anything Rule 1 has already caught	If the remaining figure exceeds $30,000, the smaller of (the latest gift) or (the excess over $30,000) becomes a deprived asset for 5 years from the date of that gift.

ℹ️ Each gift has its own 5-year clock

If you make several gifts over time and some of them breach the rules, each one starts its own independent 5-year deprivation period from the date of that gift. They don't all run from the date of your first gift, and they don't all expire together. This matters when you're planning a multi-year gifting strategy.

What happens if you go over the limit?

When a gift becomes a "deprived asset," Centrelink treats it as if you still own it. That triggers a double impact:

It's counted under the assets test. The deprived amount is added back to your assessable assets at its original value, exactly as if the money or asset were still on your balance sheet.
It's deemed under the income test. The deprived amount is treated as a financial asset and deemed to earn income at the prevailing deeming rates, exactly as if it were cash sitting in a bank account.
For 5 full years from the date of the gift. After exactly 5 years, the deprivation drops off and the amount disappears from your assessment.

⚠️ "The money's gone" doesn't help

Once a gift is classified as deprivation, Centrelink keeps counting it for 5 years regardless of what happens to the money afterwards. If your child loses it, spends it, or the asset value crashes — Centrelink still counts the original deprived amount at its original value, every fortnight, for 5 years.

Worked examples

The rules sound complicated, but they're easier to see in action. Here are four common scenarios.

📝 Example 1: Staying within the limits

Margaret gifts her daughter $8,000 cash in October and her son $2,000 in April of the same financial year. Total gifts for the financial year: $10,000.

Rule 1 (annual): She's right on the $10,000 limit for the year. ✓
Rule 2 (5-year): Her total gifts over the last 5 years are just $10,000 — well below the $30,000 cap. ✓

✅ No deprivation. Margaret's pension is unaffected. She still has $20,000 of "headroom" left over the next 4 financial years before she'd hit the $30,000 cap.

📝 Example 2: Exceeding the annual limit in one go

Brian gifts his son $25,000 in November to help with a house deposit. It's his only gift in the last 5 years.

Rule 1 (annual): Brian's allowed $10,000 in the financial year. He's gifted $25,000 — that's $15,000 over the limit. $15,000 becomes a deprived asset for 5 years, with the clock starting in November.
Rule 2 (5-year): This is Brian's only gift, so there's nothing else to add up. Rule 2 doesn't catch any more. ✓

⚠️ Centrelink adds $15,000 back to Brian's assessable assets and deems it under the income test for 5 years. If he's in the assets-test taper zone, that's a reduction of roughly $45 a fortnight × 130 fortnights ≈ $5,850 in foregone pension over 5 years.

📝 Example 3: Steady gifts that quietly breach the 5-year cap

Helen has gifted her grandchildren $10,000 every financial year for the past three years. This year she wants to gift another $10,000.

Rule 1 (annual): Each year's $10,000 stays exactly on the annual limit. ✓
Rule 2 (5-year): Add up all Helen's gifts over the past 5 years: $40,000. That's $10,000 over the $30,000 cap. So this year's gift gets caught — $10,000 becomes a deprived asset, with the 5-year clock starting from the date she made it.

⚠️ Helen probably didn't realise this was coming — she stayed within $10,000 each year. But the rolling 5-year test catches her. Each annual gift counts toward the running total for 5 years.

📝 Example 4: A "loan" that gets forgiven

Three years ago, David "lent" his daughter $30,000 interest-free with no repayment schedule. This year, he tells her to forget about repaying it.

For the past three years, the $30,000 stayed on David's balance sheet as an asset (and was deemed to earn income under the income test, even though it paid him nothing). It quietly cost him pension every fortnight.
The day he forgives the loan, the whole $30,000 becomes a gift on that date.
Rule 1: David's allowed $10,000 in the financial year, but the forgiven amount is $30,000. That's $20,000 over the limit. $20,000 becomes a deprived asset for 5 years from the day he forgave the loan.

⚠️ The "loan" structure didn't help. It cost him deemed income during the loan years AND triggers deprivation on forgiveness. There ARE legitimate ways to structure family loans and gradual forgiveness — but it has to be done with proper documentation and timing.

We're building a separate guide on multi-year gifting strategies using documented loans and structured forgiveness — coming soon under our Advanced Centrelink Planning section.

When gifting early actually makes you better off

Here's the part most people don't think about. The 5-year deprivation period ends. Doing nothing doesn't end. If an asset is genuinely surplus to your needs — or you were always planning to gift it eventually — taking a 5-year hit can leave you significantly better off forever after.

💡 The counter-intuitive truth: gift early if it's already surplus

Imagine you've got a classic car worth $40,000 sitting in the shed that you'll never drive again. Or a caravan you stopped using years ago. Or shares in a family business you've handed operationally to your kids. Right now, that $40,000 of "surplus" assets is reducing your pension by roughly $120 a fortnight forever — about $3,120 a year, every year, for the rest of your life.

If you gift that $40,000 to a family member now:

$10,000 is within the annual limit — no impact
$30,000 becomes a deprived asset for 5 years, costing you roughly $90/fortnight ≈ $11,700 in foregone pension over 5 years
After year 5, the deprivation drops off completely — and you keep the full pension permanently because the asset is genuinely gone

📊 Break-even at around 3.75 years. Every year after that is pure gain. Plus your family enjoys the asset while you're alive to see it. Doing nothing means a smaller-but-permanent pension hit for the rest of your life.

This logic only works for assets that are genuinely surplus. Don't gift away assets you'll need to live on. And please — for any large transfer — talk it through with a planner first. The numbers above are illustrative; your actual outcome depends on your full assets-and-income test position.

Timing tip: the financial-year boundary

📅 The 30 June trick

Centrelink counts gifts by financial year, not calendar year. The annual limit resets on 1 July every year. So a $10,000 gift on 28 June and another $10,000 gift on 3 July are in two different financial years — both within the annual limit, both safe from Rule 1.

If you're planning a larger transfer of, say, $20,000, splitting it across the 30 June boundary instead of doing it all at once can save you from triggering Rule 1. Just remember the rolling 5-year $30,000 cap still applies, so this trick only goes so far — it doesn't let you gift unlimited amounts by chopping them up.

Pre-pension gifting — does it still count?

Yes — Centrelink looks at gifts you made up to 5 years before you applied for the Age Pension. If you've made substantial gifts in the years before reaching pension age, those gifts may still be counted as deprived assets when you first claim.

The flip side: any gift made more than 5 years before you claim falls outside the assessment window completely. This is one of the strongest reasons to start your gifting plan early — well before you actually need to claim the pension. A gift made at age 62 will be entirely outside the window by the time you claim at 67.

What is NOT treated as a gift

Some things look like gifts but aren't caught by the deprivation rules:

Reasonable living expenses for a dependent child in your care
Normal day-to-day expenses — small birthday and Christmas presents within the free area
A properly structured granny flat arrangement (assessed under a separate set of rules — not the gifting rules)
Genuine loans where you have proper documentation, a written agreement, a repayment schedule, and a reasonable interest rate (note: the loan itself remains your asset and is deemed to earn income while it's outstanding)
Selling an asset for its genuine market value (even if the buyer is a family member)

Common misconceptions

🚫 Things people get wrong about gifting

"My spouse and I have separate limits." No — couples share one combined limit.
"The money's gone so Centrelink can't count it." They can and they do. For 5 years from the date of the gift.
"I'll just call it a loan." If there's no genuine loan agreement, no repayment schedule, no interest, and no intention to repay — Centrelink will treat it as a gift on the date the money changed hands.
"I haven't claimed the pension yet, so it doesn't count." Gifts in the 5 years before your claim are assessed when you apply.
"It's under $10,000 so I don't have to tell Centrelink." You still have to report it within 14 days. Reporting is separate from whether the gift triggers deprivation.
"Charitable donations don't count." They do. A large lump-sum donation is still a gift.

Reporting gifts to Centrelink

You're required to report any gift to Centrelink within 14 days — even gifts that are well within the allowable limits. Reporting and deprivation are two separate things: the rules require reporting; whether deprivation applies depends on the amounts.

The easiest ways to report:

Through your Centrelink online account via myGov — under "Update your details" or "Income and assets"
Via the Express Plus Centrelink app on your phone
By calling the Older Australians line (132 300) or visiting a Centrelink service centre

If you're unsure how to access your online account or you're not sure what counts, the staff at any Centrelink service centre or the Older Australians line on 132 300 can walk you through it.

Want to see how a gift would affect your pension?

Use the How Much Age Pension Can I Get? calculator to model your situation with and without a planned gift.

Frequently asked questions

How much can I gift my children before it affects my Age Pension?

Up to $10,000 in a single financial year and no more than $30,000 over any rolling 5-year period. Both limits apply at the same time. Anything above either limit is treated as a deprived asset for 5 years from the date of each gift.

Does the $10,000 limit apply to each person in a couple?

No. The limits apply to a couple combined, not per person. A couple together shares one $10,000 annual limit and one $30,000 five-year limit, regardless of who makes the gift or whose name the asset was in. This is one of the most common misconceptions about the rules.

Do I have to tell Centrelink if I give my children money?

Yes. Any gift must be reported within 14 days, even if it's well within the allowable limits. Reporting and deprivation are two separate things — the rules require you to report; whether deprivation applies depends on the amounts. Failing to report is a compliance breach and can lead to debts and penalties.

Can I give money to my children before I apply for the Age Pension?

Yes, but Centrelink looks at gifts made in the 5 years before your claim. Gifts within that window are still subject to the rules. Gifts older than 5 years are completely outside the assessment. This is why starting your gifting plan well before pension age gives you more flexibility.

Is forgiving a loan to my child counted as a gift?

Yes. The forgiven amount is treated as a gift on the date you forgive it. Until forgiveness, the loan remains your asset and is deemed to earn income under the income test — even if it pays no actual interest. This means "I'll just call it a loan" usually doesn't help, and can actually make things worse.

Are gifts to charity counted by Centrelink?

Yes. Charitable donations are treated the same as any other gift. If your total gifts (including donations) exceed the annual or 5-year limits, the excess is a deprived asset for 5 years. This catches people out when they donate a large amount after an inheritance or asset sale.

Does paying my grandchild's school fees count as a gift?

If you pay the fees directly and the grandchild is not a dependent in your care, generally yes — it counts as a gift. Occasional small gifts and reasonable everyday expenses for a dependent child in your care are not treated as deprivation, but regular substantial payments for someone who isn't your dependent will be.

Can I gift assets to reduce my assessable assets for the assets test?

You can — but only up to the gifting limits. Excess gifts remain assessable for 5 years (under both the assets test and the income test via deeming), so they continue to count exactly as if you still owned them. That said, gifting larger amounts is sometimes still worthwhile if the asset is genuinely surplus to your needs — see the "When gifting early actually makes you better off" section above for the break-even logic.

What to do next

Gifting decisions feel small in the moment and large in retrospect. A $20,000 transfer at the wrong time can cost you $5,000–$6,000 in foregone pension over 5 years. The same transfer done well — or split across a financial-year boundary, or postponed until you're past pension age, or structured as part of a wider plan — might cost you nothing at all. The rules aren't trying to stop you helping your family. They're just there to stop people sheltering large amounts of money to claim more pension.

If you're planning anything sizeable — particularly anything above $10,000, or any transfer of property — get it checked first. The cost of a planning conversation is a fraction of the cost of getting it wrong.

📋 Related topics on RetirementCalculators.com.au

Assets Test Explained Deeming Rules How Much Pension Can I Get? Granny Flat Interests Inheritance & Windfalls Centrelink Glossary

Thinking of giving assets to family?

Gifting decisions can affect your pension for 5 years or longer. Get it right the first time — talk it through before you act.

Book a Coaching Call Online Course

Accuracy Note: Whilst every care has been taken to ensure this information is current and accurate, I am only one person and there's a very good chance I'll miss something. If you spot a factual error, or if a calculator breaks or gives an incorrect answer, I'd be really grateful if you could let me know via the Contact Us page so I can fix it as quickly as possible.

It would speed up the correction process enormously if you could cite the title of the page where you found the error and describe what the error is. Thank you for your support in keeping this resource accurate for everyone's benefit.

Disclaimer: The information on this page is general in nature only and does not take into account your individual circumstances. It is not financial advice or legal advice. Centrelink and Services Australia rules can change. Before making any decision involving the gifting of assets, the structuring of family loans, or any other significant financial transaction, please consult a qualified financial planner, accountant, or solicitor.

Primary sources: Services Australia — Gifting · DSS Social Security Guide §4.1 — Deprivation

Page last reviewed by Mary at RetirementCalculators.com.au