Financial Planning

How gifting can affect your clients’ payments

29 November 2018

Hank Jongen

Hank Jongen is General Manager at the Department of Human Services.

The gifting of assets from clients may affect their social security entitlements.

Gifting is when people give away money, assets or income for less than full market value. It can apply to houses, trusts, inheritance, wages and even cash.

Before your clients give away any amount of money, assets or income, it’s important they know what effect this may have on their financial security.

If people need to meet an asset or income test to receive a payment from the Department of Human Services, we may count gifts towards these tests. We’ll assess gifts to see:

  • how they reduce your client’s assets; and
  • if they go over the allowable amounts for gifting.


The allowable gifting amount is the most your clients can gift without affecting their payments from the Government. Another term for it is the ‘gifting free amount’.

The allowable amount for a single person or a couple’s combined amount is:

  • $10,000 in a financial year; or
  • $30,000 in five financial years in a row.


If your clients gift more than this amount, for five years after the gift date, the asset value over the allowable amount will:

  • count in your assets test; and
  • have deeming applied and included in your income test.


Deeming is where we work out income from your client’s financial assets. We add this to their other income and apply an income test to work out their payment rate.

However, this can all change if the person your client gifted to gives the assets back.