Centrelink & Inheritance...anyone know how it works??

[Daffodil Mumma]

Little bit of back info....DH & I receive some FTB A & B. He works full time I work part time & DS gets CCB & CCR (hope Im getting the initials right lol)

So anyway, recently my MIL passed away ( but thats another story) so my DH and siblings are working thru the estate etc and it looks like a reasonable sum of money will be going to each child. My SIL instantly said......when you get your share hide it or spend it straight away, if centrelink finds out they will stop your payments!!!

Ok so SIL can tend towards drama queen lol but it did get me wondering, do I have to declare the money as "ïncome" and have my payments reduced or because its a "gift" does it not count??

Basically Im trying to figure out the best thing to do before we get it and how we should handle it!!

So has anyone else been in a similar situation??? With everything else going on I dont want to hold up the Centrelink phone lines for something like this until the money is closer if that makes sense.

[diannescruffy]

You will have to declare the money but I think it is declared as a gift, BG will let you know. When my father passed away, I was left with his house, no money so not too sure about receiving money. The house has not affected our payments at all. All the best.

Regards,
Dianne

[Glamourcide]

DH and I have been working through legal tangles for over 2 years now to sort out his inheritance from his late mother - we are at the 'any day now' stage and just waiting on our w*nk of a lawyer (who's already taken $60k in legal fees from the estate) to sort out the contract of sale so we can officially start paying off the house we inherited. As far as I know, the inheritance will not affect my Family Tax Benefit but I will have to wait and see what happens as I've also held off changing my details/letting them know my circumstances until things are actually settled.
Good luck, I'm sorry for your loss and I hope that the inheritance doesn't adversely affect your payments x

[toomanyshoes]

It all depends how much it is. Best to call them and ask.

[widdly]

i am on the PPS and have a very old great grandfather who I will inherit a very substantial sum of money from. From my understanding, centrelink will calculate how long I can live off the inheritance and not pay me PPS for that length of time. Luckily I have just gotten a new job, hopefully I will be full time by then, so I can use the inheritance to buy a house. Not sure if it effects FTB payments though

[briggsy's girl]

for ftb purposes, you need to check with your accountant on what portion (if any) is taxable. a lot of it will depend on what you're doing with the money - if you invest a large sum of money, it will earn interest, which is taxable, and will, in turn, impact your payments

[BeautifulMadness]

I know when my dad started taking momney out of his super...he gets a certian amount every may ( he started this in 2009) and he had to declare ( which is retarted)

[briggsy's girl]

why is it "retarded"?

your super is there to improve your quality of living in your later years so that you are not living JUST on the pension (cos it's sweet bugger all really) - it is deemed an income and should be declared. there is a certain amount you can "earn" before your pension is impacted, and then it impacts you, but no where near at a dollar for dollar rate.

not that it is in ANY way relevant to the OP's question though! totally not related

[Daffodil Mumma]

Thanks BG so far we are thinking about locking some in a trust for DS for he's like 21, paying off some debts and just leaving the rest in our regular savings account (so not a huge interest earning one)

[briggsy's girl]

Thanks BG so far we are thinking about locking some in a trust for DS for he's like 21, paying off some debts and just leaving the rest in our regular savings account (so not a huge interest earning one)

make sure you get financial advice about the best way to set up trust fund - from what i have gathered, if it isn't set up properly, and gains interest, it can be deemed that the interest is taxable for the people who set up the fund (or something like that - would hate for you to make the gesture and then get slogged tax on money you have no access too)

[Daffodil Mumma]

Oh wow yea good point.....I hadnt even thought of that!!! Just assumed if it was in DS name it would be fine!! Shall chat to the accountant for sure

[2girls]

Helen, usually if it's invested in a child's name it's fine, however you need to be careful how much the investment earns. Kids can't earn much before they start having to pay 46.5% tax (top marginal tax rate) - designed to stop people hiding money in their kids' names, but not much help when you're just trying to do the right thing! However, there are other options like investment bonds that will be tax free for all of you provided you don't access it for 10 years. The accountant should be able to help you with this.

[Daffodil Mumma]

Oh my goodness this is more confusing than I ever thought it would be!!! I definately need to get my research done on this one before we get much further!!
Thank you all for the advice

[chris6]

Just been off the phone with centrelink. Inheritance no matter what the amount is,is exempt, however any money earned from this money eg interest needs to be declared big weight off my mind & hope it helps you.