Can you give a house?

[kathryn d]

I mentioned Centerlink because the OP hasn't mentioned any other assets AND she's near retirement. If she gifts the house she could end up with no asset and no pension.

As the house is a PPOR, and assuming she has no other assets, why would she rent it out (and get only a small pension only for doing it) and pay rent elsewhere?

How would she be better off?

I agree a lot of information is missing here to give a complete answer.
I was referring more in general terms.

It is a bit disturbing when parents are so willing to gift their property so easily. They have no idea what will happen in the future to their children.
Who they think may be there to care for them in the future, may not be. Whether it be physically (death), emotionally (brain damaged, by injury), or because the relationship has become estranged.
Then there is the lifestyle to be considered of the children. Will there be bankruptcies, divorces, or lawsuits to contend with?

What choice does the parent have then?

Just starting retirement is a long way from a nursing home.

 

[Sheryn]

but why does it seem everyone wants to do whatever they can to get that almighty Centerlink?

Old thinking...

Some people feel they are entitled to a Centrelink pension at 65 years of age (yeah I know pension age has increased) as they worked and paid taxes all their life or fought in wars.

Another benefit is if you receive $1 of Centrelink pension then you are entitled to cheaper perscription medications. a fair portion of older people are on a lot of pills.


Regards
Sheryn

 

[kathryn d]

But is it worth $650k?

 

[Scott No Mates]

Your mum's house is her ppor and is exempt from any assets test. As Terry points out, why not just park it in her will?

 

[pennyk]

No offense to the OP, but why does it seem everyone wants to do whatever they can to get that almighty Centerlink?

.

Centrelink is involved with more than just pensions, which is why it is relevant to ALL elderly people.
If someone needs to go to a nursing home, then it will be Centrelink that determines what they need to pay, no matter whether they are a pensioner or not.
So, whether someone is a pensioner or a self funded retiree, they need to think about centrelink rulings. A particular concern is the asset test, because if someone "gifts" an asset and then needs to go to a nursing home, centrelink views them as still owning that asset for a period of time, and they will need to pay a higher fee. This is to prevent people giving away their assets to try to access greater government benefits.

 

[kathryn d]

Centrelink is involved with more than just pensions, which is why it is relevant to ALL elderly people.
If someone needs to go to a nursing home, then it will be Centrelink that determines what they need to pay, no matter whether they are a pensioner or not.
So, whether someone is a pensioner or a self funded retiree, they need to think about centrelink rulings. A particular concern is the asset test, because if someone "gifts" an asset and then needs to go to a nursing home, centrelink views them as still owning that asset for a period of time, and they will need to pay a higher fee. This is to prevent people giving away their assets to try to access greater government benefits.

I'm not arguing that point.
I find it disgusting that some children never want to seem to wait until the body is cold. Many are looking out for their own interests.
As I mentioned previously, there are many things that could happen between a newly retired and a possibility of a nursing home.

Does everyone here, who is so concerned about qualifying for Centerlink, going to sign over their assetts to their children at retirement age?

 

[marg4000]

I'm not arguing that point.
I find it disgusting that some children never want to seem to wait until the body is cold. Many are looking out for their own interests.
As I mentioned previously, there are many things that could happen between a newly retired and a possibility of a nursing home.

Does everyone here, who is so concerned about qualifying for Centerlink, going to sign over their assetts to their children at retirement age?

Totally agree.

As someone on the doorstep of retirement I am concerned about the number of posts on this forum of parents gifting houses to kids. Particularly since the posts come from the hopeful recipient. And more particularly since the home is usually the main or only asset the parent owns. I've yet to see a post from a parent saying they have too many assets and want to start giving some away.

My kids will have to wait for whatever is left - and I hope they are in for a L-O-N-G wait!!. We have no way of knowing how long we will live, or what our future financial needs will be. We have worked hard to ensure we have a comfortable retirement, so giving assets away early is out of the question.
Marg

 

[Sunfish]

Marg, I AM retired and while I help out the kids as I see fit, they know the house is OURS.

 

[weg]

Does everyone here, who is so concerned about qualifying for Centerlink, going to sign over their assetts to their children at retirement age?

The way I read it was those (all the posters that responded) who seemed so concerned about qualifying for Centerlink, were either not supportive of gifting assets at retirement or neutral (simply giving advice on the implications of gifting), not the other way around .

 

[weg]

I wonder how common this is? Gifting, when you have more than you feel you need and wanting to share it, and knowing what you're doing, is totally different and OK (happens all the time), but your PPOR when that is all you have .

It is beyond me why anyone would think it's OK to take the parents only asset, even if the parent wanted to give it away - probably why I didn't think anyone here thought it was OK (even though I know elderly parents are often taken advantage of).

I personally know of only one case ever where this has happened.

In this case (recent) the middle aged child pressured the elderly parent in signing over the house, knowing there'd be implications, but did not make their financially naive parent aware (parent is on a pension and Centerlink don't know, yet).

The other awful thing is the other sibling is completely oblivious this has occurred. Mother is close to both children. How ugly is that?

 

[wylie]

Whilst I agree with most of the posts here, I just think that re-reading the original question, there is no mention that the house is her only asset, or anything to indicate this.

Everybody is jumping to conclusions without knowing the story. I wouldn't be doing this, would NEVER ask it of my parents either... but we don't know anything about the mother. Maybe she wants to know the answer, maybe the poster is simply asking for her. She could have ten IPs. (I know that if she did, she would probably have more of a clue, but it IS possible .)

Hopefully, now he/she has read the answers, he/she will realise the implications and decide it is a bad idea for the mother.

I hope so anyway. Perhaps I just assume most people are moral and would not take advantage of a situation .

 

[weg]

Agree. I think it was only the usual happening where a thread goes off in slightly different direction, forgeting the original posters specific Q altogether .

 

[kathryn d]

Given the info the OP has provided, this is the mum's PPOR, and son wants mum to rent one of his IP's.

That sounds like she doesn't own any other properties to go to.

Even if you just take the information at face value, it is a terrible position to put a parent in, even if she mentions it first.

Who in their "right" mind gives away such a valuable assett, at the detriment of their own financial security?

Whether it is her only assett is irrelevent.

Elder abuse can take all forms.

 

[Terryw]

Another potential reason to gift an asset before death is if there is conflict in the family and it is likely that someone, usually another child, will challenge the will. This will not always work though.

I have heard of this happening where a parent remarries and wants certain assets to go to the kids from the first marriage.