In response to current policy, they have come up with three ways to transfer real estate to their children, and they can retain their goverment pension eligibility.
All three methods are related to what is known as "Granny Flat", and Chinese is often called "milk house".
Talking about Granny Flat, can actually be a room, or a master bedroom in an existing house.
There is only one major adjustment involved here, that is, "finance". Parents will no longer be owners of the house, since it has been transferred to their adult children.
In return, adult children agree to take care of their parents and provide them with a home.
Adult children have to pay for the house's bills and repairs, and the elderly can take care of their grandchildren as part of the deal. Australia's goverment agency, Centrelink (Department of Human Service), approved the arrangement, meaning former homeowners are still eligible for goverment pensions and public old-age care, as they have become "penniless".
The concrete implementation of these three approaches is described below:
1, complete the transfer of ownership of the house
In this case, older parents transfer the house to their adult children in exchange for a "Granny Flat" residency, which means parents have the right to live there until they are old.
This approach may require a formal agreement with a lawyer. As long as the exchange itself is considered fair by the Centrelink, it should not affect your pension benefits.
But if Centrelink doesn't think it's a "balanced swap." If, for example, it thinks parents "pay too much"-then they can be punished based on "reasonable criteria".
In general, for 65-year-olds, the "upper limit" is about A $ six hundred thousand; for a 75-year-old, the cap will fall to about A $ four hundred thousand.
2. Build a new Granny Flat in the backyard.
Many people think this is the most traditional Granny Flat arrangement.
The old mother may be too weak for the house and the yard, but the body is too weak to look after the lawn, the back garden, the housekeeping, and so on. So she paid for a second house in the back yard, and her daughter or son took over her original house.
3. Sell the house and re-buy the house in the name of the child
This is a way to bring adult children and their parents closer geographically, by selling their own houses and buying new homes to live together. The new house is written in the name of the child.
Suppose your own house is in Parramatta, but your mother lives in Hurstville, and in theory, you can buy a bigger house in a new place for everyone to live together. In this way, mother's pension benefits will not be sacrificed. Similarly, the Centrelink must consider this arrangement to be reasonable.
Note: there is a way not to do it
Pension, this is the biggest taboo.
This approach is entirely different from the above-mentioned arrangement of the three "Granny Flat" because it will not be treated as fair trade.
The point here is that: Granny Flat's arrangement is seen as an exchange, not a gift.
By the way, your current allowed gift limit is only $10,000 a year, while the five-year gift limit is $300.
Otherwise, your pension benefits will be affected. Because of too many gifts, will be considered by Centrelink that you are trying to "dilute" your wealth.