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Centrelink deeming - on family loans

Discussion in 'Accounting, Tax & Legal' started by Lozwest, 12th Nov, 2010.

  1. Lozwest

    Lozwest New Member

    12th Nov, 2010
    Bungonia. NSW
    Hi, need help here - pretty confused.... My fiance lent his daughter $50,000 in June 2004 for deposit on her house. She has now refinanced so she can give him back the $50,000. He is retiring in December. He has already spoken to centrlink and told them about the loan, so they have it in their files, even though he has not applied as yet for aged pension until December.
    He will be buying a car for himself with this money, hopefully within a month or two of getting it back, but he was told he will still be deemed for the loan, though he has made no interest at all on it himself. Can anyone advise how this works and what he would be likely to lose for the couple of months it may be in his bank account? (they weren't very clear at centrelink, so he came away more confused). HOPE SOMEONE CAN HELP HERE , thanks.:confused::confused:
  2. Superman

    Superman Well-Known Member

    6th Nov, 2007
    Gold Coast, QLD
    Hi Lozwest

    At the moment the $50,000 is an asset (non-interest bearing loan) - so it will be deemed under the income test as well as included under the asset test.

    When he receives the $50,000 back from his daughter - it will be treated the same.

    When he purchases a car, the car will be counted under the asset test only - so it will not be deemed.

    A lot of it comes down to the timing of his application - it would be best if he purchases the car before lodging his application - that way whatever he spends on the car would not be deemed.

    Otherwise maybe just discuss the issue with Centrelink (one of their financial officers) as there may be a work around.

    I hope this helps