Question for any experts in the field. Parents apply for a loan using their house as security. They lend the money to their son to use for investments. There is a loan agreement drawn up between the parties which states the son needs to pay for all costs associated with the loan, which is the same as the agreement the parents have with the loan provider. Does this effect their pension? Cheers.
I don't know and would hate to make a guess. I suggest you ring Centrelink and ask them. be great if you posted the answer here too! Cheers,
Hi Steve, Here's an opinion from a friend who used to work at Centrelink: "The loan can be assessed as gifting , which would reduce the Pension depending on how much was loaned/gifted Only $10000 ( I think) can be gifted per annum Check www.centrelink.gov,au Sometimes there can be exemptions to gifting but I am not an expert in the matter A financial adviser is much better than me at this stuff and I would highly Recommend that any Pensioner considering this should make an appointment with a FIS officer (financial information service) To discuss/investigate possible ramifications before going ahead with this as once its done they can be affected financially for a very long time and this can lead to family breakdown in cases I have seen in the past. Send them to centrelink ." So, I guess the bottom line is - make an appointment with Centrelink!! Cheers, Medine
For those interested in the 'Gifting' area, the following link may be useful: http://www.centrelink.gov.au/internet/internet.nsf/publications/fis012.htm Looks like while that $10,000pa provision still exists, since the 1/7/02 an additional rule limiting it to $30,000 over a five year period applies........but as you say, seek Professional advice.
