{"id":3606,"date":"2026-11-06T09:00:00","date_gmt":"2026-11-05T22:00:00","guid":{"rendered":"https:\/\/chipkie.com\/au\/?p=3606"},"modified":"2026-11-06T09:00:00","modified_gmt":"2026-11-05T22:00:00","slug":"family-loan-centrelink","status":"publish","type":"post","link":"https:\/\/chipkie.com\/au\/blog\/2026\/11\/06\/family-loan-centrelink\/","title":{"rendered":"Family Loans and Centrelink: What to Report"},"content":{"rendered":"<p><em>By <strong>The Chipkie Team<\/strong>, Personal Finance Editorial Team &nbsp;\u00b7&nbsp; Last updated 25 October 2026<\/em><\/p>\n<p>Helping your adult child with a deposit or an urgent bill can leave you with less cash in the bank, but it does not necessarily leave you with fewer assessable assets. A Centrelink check on a family loan starts with what you still have the right to receive, rather than where the original money sits.<\/p>\n<p>For a lender receiving an income support payment, the useful first step is a clear balance sheet. Keep the unpaid principal, any interest and the rest of your financial assets separate so Services Australia can assess the actual arrangement.<\/p>\n<h2>Key Takeaways<\/h2>\n<ul>\n<li>An outstanding loan to a relative generally remains a financial asset of the lender.<\/li>\n<li>An interest-free loan can still produce deemed income for means-testing purposes.<\/li>\n<li>From 20 September 2026, the lower and upper deeming rates are 1.75% and 3.75%.<\/li>\n<li>Repayments, forgiveness and a genuine loss of recoverability require different records and assessment.<\/li>\n<\/ul>\n<h2>Does a family loan reduce your Centrelink assets?<\/h2>\n<p>Lending money to a relative generally changes the form of your financial assets rather than removing their value. The unpaid loan remains an asset even when the borrower pays no interest. Keep evidence of the amount still owed and ask Services Australia how your payment rules apply before assuming your entitlement will change.<\/p>\n<p>The Department of Veterans\u2019 Affairs explains that <a href=\"https:\/\/www.dva.gov.au\/access-benefits\/pensions-and-payments\/what-changes-your-payments\/your-property-or-accommodation\/loans-and-mortgages\" target=\"_blank\" rel=\"noopener\">loans made to others are assessed as financial assets<\/a>. Its payment rules should not be substituted for your particular Centrelink assessment.<\/p>\n<table>\n<tr>\n<th>Item to distinguish<\/th>\n<th>What your preparation sheet should show<\/th>\n<\/tr>\n<tr>\n<td>Original advance<\/td>\n<td>The amount actually lent, its date and the transfer receipt. This establishes the starting point, rather than today&#8217;s remaining balance.<\/td>\n<\/tr>\n<tr>\n<td>Outstanding principal<\/td>\n<td>The original principal less verified principal repayments. Show interest separately so the figure can be checked against the agreement.<\/td>\n<\/tr>\n<tr>\n<td>Ownership share<\/td>\n<td>Who lent the money and each person&#8217;s share. A joint advance needs evidence of ownership, rather than an assumed equal split.<\/td>\n<\/tr>\n<tr>\n<td>Cash received back<\/td>\n<td>Where repayments went and what remains in your bank accounts. Repaid money still held as savings is another financial asset.<\/td>\n<\/tr>\n<tr>\n<td>Interest record<\/td>\n<td>The contractual rate, actual interest received and any agreed change. Keep a calculation or statement supporting each interest entry rather than combining it with principal.<\/td>\n<\/tr>\n<tr>\n<td>Payment status<\/td>\n<td>Whether repayments are current, late or disputed, with the actual dates. Explain uncertainty separately instead of quietly changing the recorded amount owed.<\/td>\n<\/tr>\n<tr>\n<td>Reporting follow-up<\/td>\n<td>The date you contacted Services Australia, reference details and evidence requested. Keep its response with your reconciliation so you can follow up accurately.<\/td>\n<\/tr>\n<\/table>\n<p>A genuine loan also differs from a gift. If you later decide to cancel it, use the separate guidance on <a href=\"https:\/\/chipkie.com\/au\/blog\/2026\/10\/05\/family-loan-forgiveness\/\">forgiving a family loan<\/a> and obtain advice before changing the arrangement.<\/p>\n<h2>How do the September 2026 deeming rates work?<\/h2>\n<p>Deeming applies assumed income to your total assessable financial investments, rather than simply counting the interest your relative actually pays. The Department of Social Services lists rates of 1.75% below the applicable threshold and 3.75% above it from 20 September 2026. Your relationship and payment circumstances determine the relevant threshold.<\/p>\n<p>The <a href=\"https:\/\/guides.dss.gov.au\/social-security-guide\/4\/4\/1\/10\" target=\"_blank\" rel=\"noopener\">DSS deeming table<\/a> lists a $66,800 threshold for a single pensioner or allowee and $110,600 for a pensioner couple. The table also records the previous rates of 1.25% and 3.25% applying from 1 July 2026.<\/p>\n<p><strong>Hypothetical single-person example:<\/strong> assume all assessable financial assets total $100,000, comprising a $40,000 family loan and $60,000 savings. There are no other financial investments in this simplified example. The comparison is annual deemed income, not a pension reduction.<\/p>\n<table>\n<tr>\n<th>Calculation<\/th>\n<th>Before 20 September<\/th>\n<th>From 20 September<\/th>\n<\/tr>\n<tr>\n<td>First $66,800<\/td>\n<td>$66,800 \u00d7 1.25% = $835<\/td>\n<td>$66,800 \u00d7 1.75% = $1,169<\/td>\n<\/tr>\n<tr>\n<td>Remaining $33,200<\/td>\n<td>$33,200 \u00d7 3.25% = $1,079<\/td>\n<td>$33,200 \u00d7 3.75% = $1,245<\/td>\n<\/tr>\n<tr>\n<td>Total annual deemed income<\/td>\n<td>$1,914<\/td>\n<td>$2,414<\/td>\n<\/tr>\n<tr>\n<td>Difference<\/td>\n<td colspan=\"2\">$500 more annual deemed income; actual payment effects require the full means-test assessment.<\/td>\n<\/tr>\n<\/table>\n<p>If the borrower repays $5,000 into savings and it stays there, the loan falls to $35,000 and savings rise to $65,000. Total financial assets remain $100,000. Looking only at the smaller loan would miss that movement.<\/p>\n<h2>What should you prepare when the loan changes?<\/h2>\n<p>Prepare a dated reconciliation showing the previous balance, each verified transaction and the new amount owed. Keep documents supporting the loan&#8217;s existence and any agreed changes. Report relevant changes through your normal Services Australia channel, and ask what evidence and reporting timeframe apply to your particular payment and circumstances.<\/p>\n<ol>\n<li><strong>Identify the arrangement:<\/strong> names, advance date, original principal, purpose and each lender&#8217;s ownership share.<\/li>\n<li><strong>Reconcile the balance:<\/strong> opening principal, dated repayments, principal allocation, actual interest and closing principal.<\/li>\n<li><strong>Attach evidence:<\/strong> agreement, bank receipts, a current balance confirmation and genuine variations signed on their actual dates.<\/li>\n<li><strong>List other assets:<\/strong> current accounts, deposits and other relevant financial investments, avoiding duplicate entries.<\/li>\n<li><strong>Flag uncertainty:<\/strong> missed payments, disputed amounts, proposed forgiveness or concerns about whether recovery remains possible.<\/li>\n<\/ol>\n<p>A Financial Information Service discussion can help you understand the social security implications. Broader tax questions need separate advice; our guide to the <a href=\"https:\/\/chipkie.com\/au\/blog\/2026\/07\/26\/tax-cost-family-support\/\">tax cost of family support<\/a> provides context for that conversation.<\/p>\n<h3>Does charging no interest stop deemed income?<\/h3>\n<p>No. An interest-free family loan can still be included in the financial investments used for deeming. Your agreement&#8217;s interest rate describes what the borrower owes you; the deemed rate is part of a social security calculation. Keep both figures clear and ask about any claimed exemption rather than assuming one applies.<\/p>\n<h3>Can you remove a loan after missed repayments?<\/h3>\n<p>A missed repayment does not by itself establish that an outstanding loan has no assessable value. Explain the circumstances and provide the agreement, payment history and recovery information to Services Australia. Obtain advice before cancelling the debt, because voluntary forgiveness and a genuinely unrecoverable loan can raise different assessment questions.<\/p>\n<h3>Will the example show your actual pension change?<\/h3>\n<p>No. The example calculates deemed income on an assumed financial-asset total only. Your payment depends on the applicable income and assets tests, other income, relationship status and personal circumstances. Ask Services Australia to assess your position; do not subtract the example&#8217;s $500 difference directly from an annual pension estimate.<\/p>\n<h2>How can you keep the reporting conversation simple?<\/h2>\n<p>Keep one agreed loan balance, a separate record of actual interest and an up-to-date list of your other financial assets. Those records make a reporting conversation easier without deciding your entitlement. If a suitable loan is going ahead, document repayment expectations and retain evidence whenever money moves or terms change.<\/p>\n<p>You can <a href=\"https:\/\/my.chipkie.com\/register?utm_source=blog&#038;utm_medium=article&#038;utm_campaign=content-engine\">create a clear family loan agreement with Chipkie<\/a> and use it alongside your payment records when preparing for advice.<\/p>\n<p><em><strong>Disclaimer:<\/strong> The information provided in this article is for general informational purposes only and does not constitute financial, legal, or tax advice. Australian laws and lending criteria vary by state and territory and may change. Always consult a licensed financial adviser, solicitor, or conveyancer before entering into any financial arrangement or property purchase with another party.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Check how a family loan affects Centrelink reporting before changing repayments. Prepare outstanding balance, deeming figures and records with this checklist.<\/p>\n","protected":false},"author":3,"featured_media":3596,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_chipkie_hreflang":"","_yoast_wpseo_focuskw":"family loan Centrelink","_yoast_wpseo_metadesc":"Check how a family loan affects Centrelink reporting before changing repayments. Prepare outstanding balance, deeming figures and records with this checklist.","_yoast_wpseo_title":"Family Loans and Centrelink: What to Report - Chipkie","_seopress_analysis_target_kw":"family loan Centrelink","_seopress_titles_desc":"Check how a family loan affects Centrelink reporting before changing repayments. 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An interest-free loan can still produce deemed income for means-testing purposes. From 20 September 2026, the lower and upper deeming rates are 1.75% and 3.75%. Repayments, forgiveness and a genuine loss of recoverability require different records and assessment. Does a family loan reduce your Centrelink assets?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Lending money to a relative generally changes the form of your financial assets rather than removing their value. The unpaid loan remains an asset even when the borrower pays no interest. Keep evidence of the amount still owed and ask Services Australia how your payment rules apply before assuming your entitlement will change.\"}}, {\"@type\": \"Question\", \"name\": \"How do the September 2026 deeming rates work?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Deeming applies assumed income to your total assessable financial investments, rather than simply counting the interest your relative actually pays. The Department of Social Services lists rates of 1.75% below the applicable threshold and 3.75% above it from 20 September 2026. Your relationship and payment circumstances determine the relevant threshold.\"}}, {\"@type\": \"Question\", \"name\": \"What should you prepare when the loan changes?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Prepare a dated reconciliation showing the previous balance, each verified transaction and the new amount owed. Keep documents supporting the loan's existence and any agreed changes. Report relevant changes through your normal Services Australia channel, and ask what evidence and reporting timeframe apply to your particular payment and circumstances.\"}}, {\"@type\": \"Question\", \"name\": \"Does charging no interest stop deemed income?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"No. An interest-free family loan can still be included in the financial investments used for deeming. 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