Join our investing community

Centrelink and Assets

Discussion in 'Accounting, Tax & Legal' started by Stevec, 6th Feb, 2006.

  1. Stevec

    Stevec Member

    Joined:
    15th Aug, 2005
    Posts:
    23
    Location:
    Sydney
    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.
     
  2. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    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,
     
  3. Medine

    Medine Active Member

    Joined:
    22nd Aug, 2005
    Posts:
    31
    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
     
  4. Alan

    Alan Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    603
    Location:
    Sydney