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hi everyone and thanks for joining us for the next 30 minutes or so we will be discussing gifting and lump sums this webinar is brought to you by the financial information service at Services Australia my name is Caroline and I'll be your host today along with my colleagues Tony and Victoria if you are joining us today in the live event there is a question and answer feature where you can ask questions in our team of moderators will answer them for you to open the question and answer click on the icon that looks like a speech bubble with a question mark in it can be found on the top right hand corner of your screen to protect your privacy please use your first name only or alternatively tick the box to send the question anonymously if our team of moderators think your question would benefit others we may publish it so everyone can see the answer otherwise we will reply directly to you for those of you watching on YouTube after the live event all the links shared during the live event will be in the summary section before we get started I would like to take a moment on behalf of services Australia to acknowledge the traditional custodians on the land we live on and pay our respects to all Elders past and present of all Aboriginal and Torres Strait Islander Nations today I am in the Ipswich area which is traditionally known in the gagara language as Tulma today Tony Victoria and I will be covering lump sums gifting and the effects that these can have on your payments and concessions we will also give you some information on the financial information service our Digital Services and how to contact us our team of moderators are also happy to answer your questions in the chat as a financial service information service officer I get to talk to people about all things money we're an information service only meaning we don't provide Financial advice or planning advice is telling people what to do with their money and when and how they should do it and we don't do that but what we can do is provide you with free independent and confidential information and education to help you understand your financial circumstances and options so that you can feel confident in taking charge of your finances and making your own decisions today's presentation is general information only so you might need to speak to us further about your individual circumstances the information in this webinar is current at a particular date and is subject to change please refer to our website for further information and to stay up to date with current payment rates and any legislative changes okay so let's get into lump sums a lump sum is a one-off amount of money they count in your income test and may affect your payments from us you must tell us about any lump sum that you get even if you think it's exempt from the income test you also need to tell us about any changes with your assets if you don't tell us we may overpay you and if this happens you may have to pay us back so it's best to always keep us updated within 14 days of a change of circumstance to avoid being paid incorrectly sometimes we can plan before we receive a lump sum and other times that's not possible the financial information service is available to help you before or after receiving a lump sum so there's two types of lump sums remunerative and non-remutative let's have a look at remunerative to put it simply remunerative means that you're receiving the payment in return for something that you have done they can include a commission payment a bonus back pay from employment directors fees leave payouts from your employer when you're still employed a signing on fee sponsorship or endorsement payment or a loan that you don't need to pay back because you've received it as a payment for your services so how do we treat these lump sums in the income test if it is a regular amount for example a monthly commission it will count in your income test for a month if it's not a regular amount we look at how long it took you to earn it for example if the commission is at the end of a six-week job that when we will assess the amount over six weeks for the income test if you didn't earn the amount over a set period we'll assess the amount of over a period of up to 52 weeks and if the lump sum payment is back pay from employment we assess it as an income for the period equal to the period the back pay covers so if you receive a back pay for 104 weeks we will assess the amount over 104 weeks for the income test the assessment period starts on the day of the your Centrelink pay period that you were paid the lump summon so what a non-remunitive lump sums they can be a royalty payment a grant or a scholarship a dividend from a private company a distribution from a private Trust we spread these amounts over 52 weeks starting on the day that you get the payment or that you're able to get the payment if your lump sum is a taxable amount it may affect your family assistance payments this is because those payments depend on your adjusted taxable income lump sums may be exempt from the income test if they meet all of the following criteria they're unlikely to happen again they're hard to predict and they're not for a service or work provided examples of these could include a one-off gift prize reward lottery win or an amount of superannuation and inheritance a property sale settlement or payment for damages to property or personal effects flood Bushfire and drought assistance some redress payments and compensation from an Australian Trust what you do with the lump sum may affect you under the income or assets test it doesn't matter if the lump sum is exempt if you spend the money on an exempt asset it may not affect you under the asset test this includes your principal Home Mortgage or medical equipment if you buy a non-financial asset it will count in the asset test this includes things like a car boat or Caravan we use the deeming rules to work out the income from your financial assets this applies if you use a lump sum to buy or add to your financial assets the deemed income comes into the income test and the assets can count in the asset test gaming rules apply to lump sums if you're putting it in the bank lending it using it to buy shares or Investments or putting it into your super fund if you're over age pension age putting a lump sum into your super fund may not affect your income or assets test if your underage pension age and you haven't started drawing on your fund otherwise known as an income stream but you're best to check with your individual circumstances with the financial information service before making these decisions if you are in receipt or applying for an allowance a waiting period may be applied if you receive a lump sum getting a lump sum from compensation because of some illness or injury can affect how much you get from in your payments if the lump sum includes money to cover the loss of wages then your pension or allowance may stop or be reduced for a long time this means you are going to have to make that lump sum look after you periodic payments are treated differently to lump sums in the past I've had some customers contact me after receiving a compensation lump sum they have used the money to pay off their mortgage which sounds like a great idea but as they are not eligible for a payment from Services Australia due to a preclusion period also known as a non-payment period they are unable to cover their ongoing living expenses so a good idea if you are expecting a compensation payment is to use our compensation estimator on our website this is helpful to estimate your preclusion period before the settlement of your compensation claim you can also find this information out by phoning our compensation team the financial information service can help you by giving you tools and resources to manage your money to meet your needs and discuss your options for the future and finally before I hand over to Tony I just want to cover payments from the national redress scheme redress payments are exempt from the Commonwealth step recovery and income tests for government payments there's no income tax on redress payments and they are protected from creditors where a person is bankrupt a redress payment doesn't count as income however the money if it's in the bank account or other Investments can form part of the asset test for government payments people who get money from redress May benefit from using the moneysmart website for tools to help them manage their money or you can contact us at the financial information service for a chat if this is raised any concerns for you you can contact our team of social workers on 132850 and ask to speak to a social worker or the national redress scheme on 1-800-737-377 on your screen now were those numbers I've just provided and also the phone numbers for our compensation team and the financial information service you may want to grab a pen and jot them down but remember you can always re-watch this presentation and that's it from me now Tony will take you through gifting now I know Caroline has given you a lot of information to this point about lump sums and remember anything you missed you'll be able to watch back in a couple of days we will post this webinar on the services Australia website that Services australia.gov dot a u and search for his webinars and also on our YouTube channel okay let's talk about gifting as financial information officers we are always asked this question how much can I gift there are no restrictions on what you do with your money but gifts above our limits will be included in the assessment of the rate pension payable so the Centrelink gifting rules a single person or a couple can gift up to ten thousand dollars per Financial year this ten thousand dollar limit applies to the combined gifted by a couple so if you're partnered it's not ten thousand dollars each it's ten thousand dollars combined additionally there's a gifting limit of thirty thousand over a five-year rolling period so I can give ten thousand this financial year 10 000 next financial year and ten thousand the following Financial year then for two Financial years I can't gift so I've had people ask me can I give 30 000 at once remember you can give what you like however in this instance 10 000 will be coded as gifting and twenty thousand will be an excess gift an assist um as an asset and deemed for five years or the other question I have is I have two children can I give them ten thousand each well you could give them ten thousand on the 30th of June and ten thousand to the other child on the first of July of a new Financial year that way both children receive the money about the same time and you don't exceed the gifting limits now the gifting rule applies to five years prior to claiming the pension there is a question in the claim in the last five years have you or your partner given away sold for less than their market value or surrendered a right to any cash property or income now I know parents want to help their children or grandparents want to help their grandchildren and give them a deposit or pay down their mortgage here's an example if you gift a hundred and fifty thousand a hundred and forty thousand will be coded as an excess gift and remain as an asset and is deemed for five years after the five years it becomes zero in some circumstances the pension increases after five years so we know that any gifting in excess of the limits will be added to all your assets or to calculate your rate of payment as I said we deem income on financial assets like gifts deeming is a Centrelink specific term it was introduced to simplify the assessment of financial assets and allows people to generate more income where possible without affecting their payment by Financial assets I mean bank or credit union accounts term deposits shares loans managed Investments the benches super and excess gifts deeming applies irrespective of the actual income received so for single people the first sixty thousand four hundred is assessed at 0.25 the remainder is assessed at 2.25 percent for a couple the first 100 200 is assessed at 0.25 and the remainder is assessed at 2.25 percent so as an example you could have a term deposit earning five percent the most we will calculate under deeming is 2.25 if your own shares we take the total value of shares and calculate the income under the deeming rules the dividends you receive are not assessed if you came onto the age pension right now and turned your super into an income stream we would only deem the balance of your super the income you receive on a fortnightly monthly or yearly basis is not assessed plus it could be returning up to nine percent per annum the maximum we would deem is 2.25 percent so part of your financial assets could include excess gifts and would be assessed income under the deeming rules even though you no longer have these assets and they are not generating any income now we may include your gift that you give away sell or transfer for less than its value examples would be if you sell or transfer a house below market value there will be gifting assessed let's say you had an investment property worth 500 000 and wanted to help your children get into the housing market and they could only afford three hundred thousand if you transfer the property for three hundred thousand then ten thousand will be coded as gifting and a hundred and ninety thousand as an excess gift remains as an asset for five years and is deemed likewise with a car I had a situation where the Granddad didn't drive his car anymore and wanted to gift it to his granddaughter as she just got a license the car was worth thirty thousand dollars therefore we coded ten thousand dollars gifting and twenty thousand as an excess gift exactly the same if you pay off someone else's loan or forgive alone so in simple terms if you deprive yourself of an asset and its value we will regard it as gifting now many people think if they give away money they will get more pension now this may be true but it doesn't happen on many occasions as you may be income tested rather than assets tested always good to speak to the financial information service other considerations uh how long would it take to get your money back again what if you need the money for your personal needs for example needing to pay for a refundable accommodation payment to enter residential aged Care Facility whilst I'm on the subject of residential aged care when you gift in excess of the limits that I've just outlined not only can It this affect your pension but these gifts will be added into your assets when assessing your fees and charges for Aged care believe it or not there is a lot to consider when gifting okay let's take a look at concession cards a low-income Healthcare card can be claimed by satisfying an income test only based on the last eight weeks prior to claiming and obviously residence requirements you must verify with payslips bank statements and other sources of income we have provided a link on the chat for you to take a look at the income limits for the low-income Healthcare card or for future reference just go to our website services australia.gov.iu and search concession ads it will give you all the information required now the healthcare card is automatically issued to benefit payments such as jobseeker and parenting payment the main benefit is cheaper medicine under the pharmaceutical benefit scheme and doctors May bulk Bill plus possible additional concessions available now the pensioner concession card pensioners who qualify for age pension automatically receive a pensioner concession card also available to other payment recipients when they are over 60 years of age and on payment greater than nine months the pension and Concession card offers cheaper medicines under the pharmaceutical benefit scheme bulk build doctors visits this is up to your doctor a bigger refund for medical costs when you reach the Medicare safety net help with hearing services discounts to redirect your mail through Australia Post now your state and territory governments and local councils may offer you more they may lower your utility bills property and water rates public transport fares Motor Vehicle Registration driver's license now every state in Australia has different concessions so if you move to another state the discounts may vary these cards are separate to other state seniors cards so refer to your state government websites for more information on those now the Commonwealth seniors health care card this card is available to people of age pension age not in receipt of the age pension or Department of Veteran Affairs payments as they are over the thresholds of income and assets the Commonwealth seniors Healthcare Card is only income tested so you may have significant assets and and obviously not eligible for a pension though your income could qualify for the Commonwealth senior's Health Care card if you are unsure you can contact the financial information service or use our online payment finder not too many people know this if you qualify for both you can have both low-income Health Care card and the Commonwealth seniors health care card now the main benefit is Discount prescriptions some doctors May bulk bill with this card but it is not a general entitlement in some states holding a commonwealth senior's Healthcare card can enhance the value of concessions available with estate seniors card so we discuss lump sums and how they are assessed and excess gifting would also come into the assessment of concessional card qualification one in three Australians find dealing with money stressful and overwhelming every day we all make dozens of decisions about money we don't realize it but it is true making informed decisions leads to Greater Financial well-being that's where the moneysmart website comes in now moneysmart offers guidance for all Australians whatever your situation wherever you find yourself in life there are simple tools tips and calculators help people of all ages backgrounds and incomes to be in control of their financial lives there are great calculators there's a reverse mortgage calculator superannuation calculator mortgage calculator credit card calculators also budget planners finding unclaimed monies there are even teachers resources available it's a great financial information website when you have a chance take a look at it moneysmart.gov dot a u put it in your to-do list now please feel free to write up any questions you would like answered we have financial information officers working with us today answering any questions so feel free um all questions are good questions I'm just going to take a look at the chat now um I'm about to receive an inheritance how much notification do I need to give great question any changes to your income or assets it is a notifiable event you have 14 days from the day after that date of the change uh another question I'm about to receive a total permanent disability payment from my super how this will affect my disability support question okay another good question you have many options with your total permanent disability payment and depending on your decision this could impact your payment differently please contact the financial information service on any of our payments lines or any of our payments lines to discuss your personal circumstances I want to help my kids pay down some of their mortgage will this affect my pension yeah look like I've just discussed if you give away cash or assets they may still count towards your income and assets this also applies if you sell them for less than what they're worth so as we said a single person can gift up to ten thousand dollars per Financial year and this 10 000 limits uh applies to combined gifted by a couple so if you're partnered it's ten thousand dollars combined not ten thousand dollars each so keep those questions going um there are some great questions there in our financial information offices we'll be answering all those questions now there are hundreds and millions of dollars held by Services Australia in unclaimed Medicare payments as we don't have the correct details and Bank details let me explain what is a held payment so a Medicare claim submitted by you or your doctor on your behalf the claim is assessed by Medicare the Medicare benefit is ready to be sent to you but we don't have any Bank details or incorrect Bank details in Medicare records Medicare is unable to send you your Medicare benefit so money is held and stays till you provide your bank details so let's take a look how you can check if you have the correct Bank details with Medicare so update your bank details using Medicare online account through your mygov so go into mygov and go to Mega care and select my details scroll down to bank details and then select edit update your bank details and select save Bank details look I know I've been guilty of not updating information for one service or another we change Financial financial institutions or accounts and forget to update information it's just good to double check now we understand not everyone is computer savvy or online in that situation they can call the Medicare phone line on one three two zero double one I'll now hand you over to my colleague Victoria with more great information thank you Tony hello everyone today I would like to provide you an interview overview of the digital products available you can manage most of your Medicare Centrelink and child support information that does online or by phone self-service Services Australia is developing and refining our products and services to allow people to manage their own Affairs in an easy to use digital channel using self-service options is a way that lots of people choose to complete their business with us mygov has been giving people a fast and simple way to access government services for many years to manage your information online create a mygov account and link your Medicare Centrelink or child support online account our Express Plus mobile ads let you access your information and complete a range of services using your mobile device we have apps for Medicare Centrelink and child support which can be downloaded from the app store or the Google Play Store a mygov account lets you link a range of Australian government services with one username and password with the mygov account you can access all your online accounts with Services Australia Centrelink Medicare and child support as well as other government online services like the Australian taxation office service Australia is improving a number of functions that make it easier to interact with us digitally if you require assistance with accessing creating or linking services to your mygov account you can find out more information by selecting the help at my.gov dot a U or calling the mygov help desk on 132307 and select option one digital assistant is now available for customers who need help using mygov the digital assistant is available any time of the day or night from a desktop or a mobile device customers can you access the assistant you through the ask a question bar on selected web pages online guides and videos are also available to help you make the most of your online accounts and express Plus mobile apps this include step-by-step instructions on many common self-service interaction transactions you can do in your online accounts such as create a mygov account and Link services to mygov update your contact details report employment income update your income and assets and advice of travel outside Australia for Centrelink you can also inform Centrelink through a digital channel channel if you have gifted an asset or Child Support Program you can check your payments update your contact detail advice of a non-agency payment or update your income submit and you can also submit an on online claim for Medicare be connected is an online resource to help Australians understand how to navigate the digital world and features a number of tutorials and useful resources to help build digital skills and confidence Financial counseling is a free and confidential service offered by not-for-profit Community organizations financial counselors are skilled professionals who provide advice and support to people struggling with bills and debt if you feel overwhelmed by debt contact a financial counselor as soon as possible if you get help early you will have many more options the free national debt helpline is open from 9 30 a.m to 4 30 PM Monday to Friday mobstrong death helpline is a free legal advice service About Money Matters for Aboriginal and Torres Strait Islander peoples from anywhere in Australia Financial Information Services officers can also help you make informed financial decisions understand the results of your decision in short and long term prepare for retirement even while you're still working and take control of your finances to increase lifestyle choices the financial information service is a free and confidential service available to all Australians with this information you will be better able to increase your confidence but financial matters like investment salary sacrifice and superannuation understand your own financial affairs and options understand financial planners and how to use the advice how do you use credit sensibly save and plan for the future through investing prepare you for receiving a lump sum of gifting understanding what happens when you move into HK we can also explain the risk of certain Financial products the roles of financial professionals the benefit of reducing debt and give you tools and resources available to help you manage your lump sums so you can cover your bills and have money available for the things that are important to you we will have free webinars to help you understand your finances choose from a range of webinars and start increasing your confidence with financial matters you can also watch recently recorded webinars from our website or on on our YouTube channel as of today we have almost 12 000 views on our playlist if English is not your first language you can use the Centrelink multilingual phone service on 131212 sorry one three one two zero two and speak to a service officer in your language or through an interpreter Centrelink indigenous call center number is 1-800-136-380 and you can use this line if you are an Aboriginal or Torres Strait Islander and need help with our payments and services if you need to speak with the financial information service officer call one three two three double zero on or any of our business numbers and save financial information when prompted if you're inquiring regarding HK and need to be connected to an aged care specialist officer call 1-800-227-472 use the national relay service on 1-800-55-660 or the TTY if you have a hearing or speech impairment and need to talk to us about Centrelink child support or Medicare services or payments on behalf of our host Tony Caroline and myself and the webinar crew I would like to thank you for joining us today I hope that you have a better understanding of how lump sums and gifting affect income support payments the recorded presentation will be available on our website and YouTube and our handy links are saved in the summary section a question and answer chart will be open for the next five minutes please feel free to keep typing your queries have a wonderful rest of your day thank you again