There is an urgent warning for Australians receiving Centrelink payments to be aware of a hidden loophole ahead of the multi-million-dollar Powerball draw.
Powerball won a whopping $150 million in Thursday night’s drawing after no one claimed the jackpot for the past six weeks.
But The Lott wants Centrelink recipients to be aware of a little-known rule if they win one of the biggest prizes.
Lott has warned recipients of Centrelink benefits that their payments could be hit by a substantial gain, even if they gave the money away.
A will be included in an asset test and can affect many benefits, such as Austudy and Age Pension.
If a person in Centrelink is lucky enough to win any of the major divisional prizes, this may affect their ability to receive benefits in the future.
The rule remains in place even if the Centrelink winner gives away all the prize money to friends and family, it said 7 news.
the lot has advised winners receiving Centrelink benefits to obtain advice from a financial adviser or Services Australia as soon as they receive their prize.
“If you currently receive a social security benefit, your award may affect your rights,” it said.
‘This will depend on the amount of your prize and the current value of your assets. Giving away your prize may also affect your social security benefits, so we recommend that you get financial advice and consult with Centrelink.’
Services Australia says lump sums, or a one-off cash payment, may be included in the recipient’s proof of income and “may affect your payment from us”.
Lump Sums Can Affect Others Too benefitssuch as the old-age pension and the Austudy.
All prizes won through entries in Golden Casket, NSW Lotteries, Tatts, Tatts NT and SA Lotteries are considered tax-free income in Australia.
But The Lott also has another warning for ticket buyers regarding taxes: another loophole that players may not be aware of.
“Once your prize is in a bank account, any interest earned on your prize is subject to income tax for both you and any recipient of the gift,” it said.
“We strongly recommend seeking professional financial advice for lottery grand prizes to ensure you receive the maximum benefit from your good fortune.”