Will I get in trouble if I give my kids something August 3rd, 2022

With visions of federal treasure Jim Chalmers somehow tapping into your bank accounts, or hidden Centrelink camera’s at your next birthday party, there are plenty of people who think it is illegal to give things away.

That notion is completely incorrect.

You can give whatever you want to whoever you want, whenever you want.
In some cases, it may trigger other things, but not automatically.

In the case of Centrelink, under the “deprivation rules” you are required to notify them of gifts to anyone within 14 days of making them. Centrelink don’t want you getting rid of assets in order to boost your pension, whether or not that was the intent.

You can give as much away as you like, but Centrelink will only reduce your assessable assets by a maximum of $10,000 a financial year, with a maximum of $30,000 over a rolling 5 year period.
If you gave $25,000 in cash to each of your 4 kids later this afternoon and you notify Centrelink, your assets will be reduced by $10,000 and you might get a boost in pension if you’re not getting a full pension now.

If you’re getting a full pension and Centrelink already had the $100,000 sitting in your bank account on their books, then nothing will change. You won’t be losing any pension.
The remaining $90,000 will still be on your records as through you still have the money. You don’t lose any pension because of this $90,000, you just don’t get any more but you have lost the use of the $90,000.

Here’s the thing. 5 years later, down-to-the-day, the remaining $90,000 drops off the Centrelink systems and if you’re not receiving a full pension because of means testing then, it might suddenly increase from that date.

If instead of cash, you give away an asset like a block of land or shares, that’s fine too. Centrelink treat it the same way although the value of the asset is frozen at the date of the gift.
The issue here, is that disposal of an asset - even as a gift, is a disposal for capital gains tax purposes.

The tax man never misses out and the actual value of the gift will need to be independently established to determine your liability. In the case of a real-estate, that might mean a licensed valuer’s formal valuation.