Excess gifting outside the 5 year gifting period
Outside the 5-year gifting period, gifting over $27,000 in any one year is considered deprivation.
MSD has discretion to include excess gifts made by a client or their partner (living or deceased) in the financial means assessment.
For more information see:
When using discretion to include excess gifting outside of the gifting period, MSD must consider the impact this would have on the client, and if they have access to alternative resources to pay for their care.
Example - excess gifting inside and outside the 5-year gifting period - couple with one person in residential care
The clients own a family home in 2016 valued at $350,000 in 2015. The clients sell the home to a trust on 1 August 2020 for $350,000, complete an Acknowledgement of Debt and begin a gifting programme.
The clients each make gifts (using forgiveness of debt) at $27,000 per year, from 1 August 2020. The final gifts are made on 1 August 2026.
Date of gift | Amount of gift |
01/08/2020 | $27,000 each |
01/08/2021 | $27,000 each |
01/08/2022 | $27,000 each |
01/08/2023 | $27,000 each |
01/08/2024 | $27,000 each |
01/08/2025 | $27,000 each |
01/08/2026 | $13,000 each |
Total gifting | $175,000 each = $350,000 |
The client's application for Residential Care Subsidy is received on 12 September 2026 as one partner has entered care.
The gifting period for the 5 years before application is from 12 September 2021 to 11 September 2026.
Gifting is assessed as:
Deed of Acknowledgement of Debt | $350,000 | |
Less gifting made in August 2020 to August 2026 | $350,000 | |
Balance of debt still to be gifted | Nil | |
Gifting outside 5 years (2020 and 2021) | $108,000 | |
Less allowable gifting outside 5 years ($27,000 x 2) | $54,000 | |
Excess gifting outside the 5 years to be considered | $54,000 | |
Gifting inside 5 years (2021 to 2026) | $242,000 | |
Less allowable gifting | $42,500 | |
Excess gifting inside the 5 years to be included | $199,500 | |
Excess gifting outside the 5 years to be considered | $54,000 |
The excess gifting of $199,500 within the 5-year period must be included in the financial means assessment.
The excess of gifting of $54,000 outside of the 5-year period is considered deprivation and may (at MSD's discretion) be included in the financial means assessment.
For more information see:
Legislation
- assets (definition) clause 4 schedule 2, Residential Care and Disability Support Services Act 2018
- exempt assets (definition) clause 4 schedule 2, Residential Care and Disability Support Services Act 2018
- Deprivation of property and income regulation 12 Residential Care and Disability Support Services Regulations 2018
