Gifting limits and the Age Pension banner

Gifting limits and the Age Pension

Gifting, otherwise known as ‘deprivation’ by Centrelink/Department of Veterans Affairs (DVA), is sometimes discussed as a strategy to reduce assessable assets. However, advisers should make sure their clients are aware of the deprivation provisions to ensure there are no adverse effects to their client’s social security entitlement.
Centrelink/DVA define gifting as a person destroying or diminishing the value of an asset, income, or a source of income. In this FAQ we focus on assets, for which there are two main gifting limits.
  1. $10,000 annual limit – applies to assets gifted during a financial year
  2. $30,000 five-year limit – applies to assets gifted during the current financial year and the previous four financial years.
Importantly, if a client breaches either of these limits, the deprivation provisions will apply. Let’s look at an example from the Department of Social Services.

Table 1: Gifting example1

Financial year
Deprived asset from $10,000 limit  Deprived asset from $30,000 five-year limit
1 $16,000
2 $8,000
3 $17,000
4 $9,000
5 $16,000
6 $7,000

Whilst these limits run concurrently, there is no double counting of asset disposals that exceed both rules. For example, from financial year five above:

Deprived asset from $10,000 limit = $16,000 - $10,000 = $6,000

Deprived asset from $30,000 five-year limit

= total gifts over last 5 years – deprived assets already counted over the last 5 years – $30,000 limit

= $66,000 ($16,000 + $8,000 + $17,000 + $9,000 + $16,000) – $26,000 ($6,000 + $7,000 + $6,000 + $7,000) - $30,000


A deprived asset is counted as an asset and subject to deeming for the income test by Centrelink/DVA for five years from the date of the relevant gift. Importantly, the deprived asset assessment doesn’t reduce by $10,000 the next financial year just because a new annual limit is available, it will still count as an asset and be deemed until the five-year period expires. 

The gifting/deprivation rules include many other nuances, but some key points to consider when advising clients include that:
  • spouses can gift between each other without triggering the deprivation provisions;
  • the limits do not apply individually for each member of a couple, but the couple as a whole;
  • deprivation rules also apply for the aged care means test;
  • disposals of life interests, including granny flat interests, can be complex and will be assessed depending on the terms of the life interest agreement;
  • gifted assets can be returned, from which point Centrelink generally cease to assess them;
  • deprivation rules may apply to beneficiaries who waive their interest in a deceased estate or super death benefit; and
  • special disability trusts have a $500,000 gifting concession limit per beneficiary.

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