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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10139
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi Lane, I am female 57 years old, on Disability Support

Customer Question

Hi Lane, I am female 57 years old, on Disability Support Pension and live in NSW Dept housing flat, rent $100 pw. A few months ago I took courage to ask a wealthy platonic friend if he would buy me a house/unit as an asset for me and also rental investment income.Sydney properties are too expensive so he agreed to look in regional areas and said that a property around $300,000 should return me a gross income of approx $280 - $320 pw, to supplement my Disability Pension. I told him that I'd spoken to Financial services, Centrelink and that they told me I could receive a gift/asset/real estate worth up to $310,000, but approx $50 per fortnight would be reduced from mu pension payment. They also told me that from January next year, 2017, that amount is increasing to $ 420,000. Two days ago my friend found a nice house 3 hours north from Sydney where I live, and today he paid the deposit at the solicitors and told them it was a gift to me, and I signed as the sole buyer/owner.
It may sound ridiculous but I have been so happy my friend is helping me so generously, and so consumed with looking for a house online that I completely forgot until today that I am only allowed to be gifted a house for up to $310. I'm now terrified I will completely lose my dis pension...I cannot survive on a possibly fluctuating gross income (from investment rental) of approx$ 300 pw. Also, I would lose all other health care card benefits/concessions etc.
Should I ask my friend to go on the house deeds as a co owner with me and then for him to adjust it after January next year? Would that solve my problem? Or is there another way to keep this new asset? And/or is there a contract my friend could sign to "promise" that he will infact agree to return/gift the WHOLE COST of the house, by the way ($385 excluding stamp duty/conveyancing), to me, and so then rewrite up the property ownership papers back to , next January 2017 when the new rule comes from Centrelink? I dont watn to lose this asset, as I have no super and no inheritance coming for my future years. Thankyou, Gemma
Submitted: 5 months ago.
Category: Finance
Expert:  Lane replied 5 months ago.

The co-ownership is an excellent idea. If you are joint owners, then the gift is only 1/2 of the value of the house.

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Likely the easiest solution... There ARE special needs trusts in your jurisdiction, but typically limited to family members, under AU law.

Expert:  Lane replied 5 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

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Let me know…

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Thanks

Lane