Centrelink rules

In order to qualify for the payment of many of the benefits available under the Social Security Act 1991 (Cth) a person may have to satisfy an income test, an assets test, or both.

A person who is involved with a private trust may have some or all of the capital and income of the trust attributed to them if they satisfy certain tests of involvement with the trust.

The tests for attribution

The following are tests for attribution:

• • a control test; and
• • a source test.

Relinquishing control

To avoid the consequences of attribution a person may relinquish control of the trust and:

• • is then deemed to have made a gift of those assets held by the trustee; and
• • will be treated as the owner of those assets for a further 5 years.

Testamentary trusts

The Centrelink attribution rules also apply to trusts created by will.

See Centrelink rules.