Contributing to my child's wedding and keeping the family peace August 5th, 2022
My eldest son is about to get married and to help with the cost of the wedding, I plan to give him $10,000.
I also have 2 other children that are not yet married and want to make sure that they don’t miss out too and don’t want to mess up my own finances, particularly my full Centrelink age pension. Can you make any suggestions about how to make the contribution to the wedding without jeopardising my pension and to maintain peace in my family?
Can I get my question answered?
There are a couple of solutions, but let’s deal with the common misunderstanding surrounding gifting. There are no laws that prevent you from doing what you like with your money. The only issue is to consider the Centrelink deprivation rules which basically prevent you from giving things away in order to get more money from “the system”.
You can reduce your assets by up to $10,000 per year with a maximum of $30,000 over a rolling 5 year period. That figure is a total figure and the $10,000 limit applies to a single or a pensioner couple. If you go over these limits, Centrelink will simply include the excess amount under the means testing system for a maximum of 5 years from the date of the deprivation.
That means for example, if you gave your kids a total of $100,000 today August 8, 2022 your assets will be decreased by $10,000 but the remaining $90,000 will be included under the income and asset means tests until Sunday, August 8 2027. From that date, the $90,000 will effectively drop-off. Importantly however, these issues are normally only going to affect someone that is ineligible or only receives a part-pension from Centrelink because of means testing.
As you receive a full pension and assuming you will be gifting something that Centrelink is already assessing, making the gift to your sone will not affect your pension at all. As for maintaining the peace, you could give your other children an equivalent amount now. In your case, your pension will stay the same, but you have lost the use of the full $30,000.
For someone who the gifting rules might affect, you may decide to stage the remaining 2 amounts of $10,000 by delaying the gifts. You could give the two remaining children $5,000 each on July 1 next year and a further $5,000 each on July 1, 2024. Finally, just let the other children know that there is $10,000 available for them too. Whether or not they decide to marry is probably irrelevant if you make it clear the money is there for “that kind of thing” if they need it.