126.96.36.199 Disposal of Assets Post 1 July 2002
An asset disposed of by a person (1.1.D.210) in excess of the relevant free area prior to claiming a Centrelink payment is assessable for 5 years from the date of disposal.
This topic discusses:
- how to determine the disposal date for assets and income, and
- the provisions for assets and income disposed of BEFORE a person claimed for a pension, benefit or allowance.
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.
Disposal prior to claim
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 1126AA Disposal of assets in income year - individuals, section 1126AB Disposal of assets in 5 year period - individuals, section 1126AC Disposal of assets in income year - members of couples, section 1126AD Disposal of assets in 5 year period - members of couples, section 1127 Disposition more than 5 years old to be disregarded