fathers inheritance effecting centerlink benefits?

[PixelPaul]

I am looking to get some advice, if you anyone is able to assist..

My Father is about to inherit some money, and a percentage of a property. He is currently on Centerlink benefits.
I am trying to find out on Services Australia if the property inheritance will effect his benefits, but they don’t have anything in writing or it is not absolutely clear.
We would like to purchase the property, through our family trust. So i would pay 2/3 to his brother and sister. And the remaining 1/3 value would remain in the house/property. And he would continue to live there for a min of 2 years.
I believe it is called a deed of variation on the will where my fathers third share is distributed to our Family Trust.
He is currently 64, so not retirement age yet.

 

[Tim W]

In short and simple... yes, it can affect his benefits.
But how and how much depends on the kind of benefit he's on, and on how much he inherits.

1. Am I right in thinking that he lives there now, but it's not his house?
(this can happen, for example, when an independent adult moves back in to look after ageing parents,
or when the adult son/ daughter suffers late-life health or financial setbacks)

2. It sounds like the inherited money is (will be) what's called a non-remunerative lump sum.

3. If he inherits property (or a share of property) that is not (or does not become) his Principal Place Of Residence,
then it's counted as an asset for the purposes of the Assets Test.

4. Involving the trust might be the hard way to do it.
You don't want to have unnecessary CGT events from trying to be too clever by half.
While others might, I am not keen to comment on the trust aspects without seeing the particular Deed.
It can also depend on who "the family" is for the purposes of the trust, and the terms of the deed.

5. Buying out his siblings with plain old cash is an option - IF they consent to it.
It can help to understand you/ he/ the trust has no right to buy them out.
(I've known cases where "other" siblings try to force the sale of a house purely out of spite towards to resident adult child)

6. The sentence

...And the remaining 1/3 value would remain in the house/property...

has no meaning.

7. I strongly suggest getting case specific financial advice about doing this set of transactions in a tax and Centrelink efficient way.
It's do-able, but it's not DIY.