18.104.22.168 Disposal of assets pre 1 July 2002
An asset disposed of by a person (1.1.D.210) in excess of the relevant free area during pre-pension years is assessable for 5 years from the date of disposal. For existing couple recipients (1.1.M.120) the pension year date for both partners (1.1.P.85) MUST be the same.
This topic discusses:
- how to determine the disposal date for assets and income
- how to determine the pension year date for couples, and
- the provisions for assets and income disposed of BEFORE a person claimed for a pension, benefit or allowance.
Act reference: SSAct section 11(10A) Pre-pension year-disposal of assets
Determining the date of disposal
The date of disposal is the earliest date that disposal of the asset or income could NOT be reversed. Deprivation provisions apply from the date of disposal.
Examples: Disposal dates include the date on which:
- a legally binding transfer agreement is signed, OR
- a legally binding transfer is registered, OR
- a legally binding transfer document, that can be registered, is in another person's possession, OR
- the date that another person takes possession.
Determining the pension year for couples
The pension year for members of a couple MUST coincide. The table below explains how to determine the pension year date for couples.
|If a couple received a pension or allowance …||then the pension year for both begins on …|
|on the same day||the date that a pension, benefit or allowance first became payable.|
|independently BEFORE becoming a couple||the day on which they became a couple.|
|AFTER becoming a couple, but on different dates||the earliest date that one partner received a pension, benefit or allowance.|
Disposal during pre-pension years
The deprivation provisions do NOT apply to disposals that took place more than 5 years before the person became qualified for a pension, benefit or allowance. SSAct section 1127 allows for disposals within 5 years of qualifying to be also disregarded where the person could not reasonably have expected that they would become qualified.
Example: A person qualifies after the unexpected death of their partner, after unexpectedly losing their job or after an unexpected illness or incapacity.
Act reference: SSAct section 1124A(1) Disposal of assets in pre-pension years-individuals, section 1125 Disposal of assets in pension years-individuals, section 1125A(1) Disposal of assets in pre-pension years-members of couples, section 1126 Disposal of assets in pension years-members of couples, section 1127 Dispositions more than 5 years old to be disregarded