Examples of deprivation

These are examples of deprivation. They are illustrative only and not intended to be a complete list. Deprivation must be assessed on a case by case basis.

Deprivation may have occurred in a number of circumstances including when the client or their partner (living or deceased):

• re-arranges their financial circumstances (including any gifting) which reduces their income or assets after having received written advice of the income contribution they are required to make
• does not generate past and/or current reasonable income from loans made to others,
• lends significant amounts of cash interest free (e.g. parents loaning deposit for house to children and not charging interest)
• makes a property transaction for less than the fair value, for example selling a property for less than current value; or renting a house for less than market rent.
• gifts over $27,000 per year outside the 5-year gifting period
• changes the ownership of land or the home registered as a joint tenancy, or where there is insufficient reason for the change (for which evidence may be required)
• makes a significant contribution to purchasing or improving property they have no ownership in
• sells or gifts a property to a trust or family member for inadequate financial return (e.g. does not get a life interest or deed of debt in exchange, or does not charge interest on loan)
• has cash assets which do not generate a reasonable income
• fails to request distributions from a trust or estate of which they are a beneficiary
• does not claim an inheritance
• fails to demand a payment or waives a right to income
• does not charge interest, or charges less than 2/3 of the Reserve Bank 6-month term deposit rate
• client instructs a trust or estate to cease distributions
• client consents to an estate ceasing distributions
• after entering care, keeps investments in a capital growth fund that does not earn a reasonable income, or exchanges income for capital
• has significant investments or financial arrangements that are structured and managed in a way that does not generate a reasonable income

The facts in each case must be considered individually.