Advice for my father.

Hi everyone,

I just want to post up some questions in regards to my fathers situation and would be extremely grateful if anyone can help - we will be seeing financial advisers soon but thought I might post on here before we go.

So the situation.

My dad currently lives by himself on quite a large property which is owned by his parents. He has medical conditions that mean he can only work a couple days a week, for a company that employs disadvantaged people - pay is around $10 an hour :( . So he basically lives off his pension.

Now my nan is very ill and basically we have been told she will pass away in the next couple of days - so serious in fact that they have stopped all feeding + treatment (shes in a coma like state). This means that when she passes on, the property will be divided up among the family members, totalling 4. Now they will be pushing to have the house sold straight away so they can get their hands on the money and if it sells for what it is worth, my dad should come out with around the 180k mark.

The problem is, we have been told that if my dad recieves a lump sum payment of that amount and holds it in his account, he is no longer eligible for the pension. So here is where we need some advice.

The options I have thought of.

1) Dad keeps money, loses the pension, rents and lives off that 180k. Won't last too long I would think, maybe 5 years? Then he is back on the pension + having to pay rent too.

2) Dad uses money to buy a unit somewhere cheap - maybe even affords a 'reliable' car. Is he now eligible for pension again because he doesn't have that 180k anymore? Only other concern is the bills - strata levies etc.

3) Dad gifts the money to one of us siblings, he then rents but is still eligible for the pension and we transfer a set amount each week to his account.

I can't think of any other options at the moment but I would be extremely grateful if someone can take the time to post up their thoughts.

Cheers,
Andrew.
 
Sorry to hear about your grandmother.

I think your dad needs specialist advice, and quickly - concerning the estate and centrelink issues.

Centrelink has various rules concerning the gifting of money - even if he gifts it he could still lose the pension.
 
Is he able to buy a cheap unit and instead of paying rent, pay off the unit?

He can own a unit and still get the pension but not get rent assistance

OR

You and your father buy the unit together, he pays his half and you take out loan for the balance, he then rents his half from you and you both split the rates etc.

Chris
 
Sorry to hear of your news and the forward complications that likely ensue.

As Terry mentioned seek advice and I would also contact Centrelink for information.

You have your hands full however navigating and further searching here may help:

http://www.centrelink.gov.au/internet/internet.nsf/individuals/index.htm

I am not sure how they treat inheritance, however I dare say they would treat it as an aset to be means tested according to their criteria.

Regardless, your last point # 3 would have a 5 year deemed gifting rule apply thereby affecting entitlements.

Seek advice from those qualified to give it and reconcile that with what Centrelink says also.

Strength to you, Andrew.
 
Andrew - People can have a surprising amount of assets before they are bumped off the pension.

I believe in your dad's case he can have $313,250 as a non-homeowner disability pensioner, but check the assets and income test:
http://www.centrelink.gov.au/internet/internet.nsf/payments/dsp_iat.htm

Triple check anything Centrelink tells you verbally - the website is more accurate than what they say over the phone.

Good luck - I think you'll find you don't have to worry too much about excess assets.
 
Hi Andrew

This info is prob a bit late and you've probably seen an adviser who may point your dad in the way of an allocated pension...

I work in a pensions area. Is your dad getting Age Pension / service pension?

these are means tested pensions and yes having an extra $180k will reduce his pension but doing a rough calculating from the info you have provided (assuming wages $320 gross per fn) I still reckon your Dad would be entitled to around $400 age pension per fortnight as a single person.

That is based on your dad earning $320 per fn gross and only having $180k financial assets all up (not sure if he has shares / mi's etc).

If you dad is rents he may be entitled to rent assistance, up to $113 per fortnight depending on the rent.

I wouldn't go down the gifting path personally, Centrelink/DVA will basically count the money the same as a pensioner having $180k in their bank account for 5 yrs.

This information is based on your dad being a single person, sorry to hear your Nan is so sick.

Scouter
 
Thanks guys, extremely grateful for the information provided.

Unfortunately, my nan passed away on Wednesday afternoon.

Thanks again.
 
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