Jewel expects to receive an inheritance soon and wants to know how her Disability Support Pension (DSP) will be affected.
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Q. Jewel
My stepfather has passed and I am the only living heir. I am wondering how this will or will not affect my DSP pension? Would I have to give the pension up and live just on the inheritance or can I retain the pension and buy a unit with it and invest the rest?
A. An inheritance is not included in the income test, however, what you do with the money could see it included in the Centrelink means tests.
If you spend the money on an exempt asset it won’t affect you under the assets test. This includes your principal home, mortgage or medical equipment.
If you buy a non-financial asset it will count in the assets test. This includes things such as artwork or a holiday home.
If you buy a unit, as you suggest, and that becomes your principal home, and you don’t own any other property, it will be exempt from the assets test. Any leftover money that you invest will be included in the assets test and will have deeming applied for the income test.
Deeming applies if you use the lump sum you get to buy or add to your financial assets. The deemed income counts in the income test. The assets may also count in the assets test.
If you invest the leftover money in a super fund and are under Age Pension age and haven’t started drawing down on your super, it will not be included in the income or assets test. If you are over Age Pension age, or are already drawing down from your super, the money will be included in the income and assets tests.
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