New: Centrelink previously capped gifts at $10,000 a year, which meant you could give away $50,000 every five years. The $10,000 per year cap remains, but they've made an additional cap of $30,000 every five years.

If you want to give away a gift of money or assets this is called gifting and the asset you give away is a "deprived asset" since you are deprived of use of that asset.

Sometimes you may wish to give assets away to family members in order to help them out, other times you may wish to reduce your assets so that you won't be affected by the Centrelink assets test.

Once upon a time, a retiree could give away their entire fortune above the asset thresholds to their children and then go on a social security pension with maximum benefits, with the children also looking after them financially - not that this would be declared to Centrelink.

The Government doesn't like a loophole, and as far as loopholes go that was a doozie. They introduced new gifting rules back in the late 80s to stop this practice.

A single person or married couple can give away up to $10,000 per year, to a maximum of $30,000 in every five years and have this money taken out of the balance sheet used in the assets test.

If you give away more than $10,000 in a pension year (or $30,000 in a five year period), the excessive amount is regarded as a "deprived asset" and stays counted in your assets register and an income is deemed from this financial investment under extended deeming for five years.

The logic is that if you have so much money you can afford to give it away then you probably don't need any more from the tax payer.

In other words, if you give away $50,000 from a $300,000 portfolio, Centrelink will only reduce your assets by $10,000, they will pretend that you still control $290,000 and will deem an income from the other $40,000 for the next five years.

One tip: deprivation does not apply to a transfer to a spouse, or to super contributions. If you are under the age pension age and want to make some assets disappear as a strategy to get around the assets test, you might want to contribute some money into super, or your spouse's super.