My father’s will requires me to pay my siblings $150k. How will that affect my pension?

September 17, 2025 — 5.01am

In my father’s will it states that I have to pay my three siblings $50,000 each on his demise. I have put aside $150,000, which is almost all my savings besides my super (I’m 61 years old, single and in an administration position). The interest has been added to my wages, and I’m paying tax on it. Would it be considered an asset if I apply for the pension at 67?

Would it be better to deposit this money into my super and pay them from there when the time comes, so the money is not being taxed? Or would that cause more problems when I go to claim the pension? My father, aged 91, is alive. He is adamant the money is not to be paid until he dies.

Wills can cause headaches for the beneficiaries if not carefully handled.Credit: Simon Letch

It would make sense to deposit the money into super as you are at an age now where access is not a problem. There will be no entry or exit fees on the contribution, and you won’t be paying tax on the earnings.

However, given your concern about the effect on your pension entitlements, I suggest you seek advice as to the possibility of moving the money into an account where you are a trustee for the three potential recipients of the money.

The documentation in your father’s will should be sufficient to convince Centrelink that your intentions are genuine. You won’t have the tax effectiveness of having the money in super, but at least you won’t have any problems when the time comes to apply for the pension.

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If our combined income is $115,000, are we eligible for the Seniors and Pensioners Tax Offset (SAPTO)?

No. SAPTO is designed to reduce or even eliminate income tax for eligible seniors, but it is subject to strict income tests. It starts to reduce for a couple once income reaches $30,994 each and cuts out entirely at $43,810 each.

For a couple, the combined rebate income limit is $87,620 – once you are above that figure, the entitlement cuts out entirely. At $115,000 you are well above the threshold, so you won’t receive any SAPTO.

Rebate income includes not just taxable income but also items such as reportable super contributions and certain fringe benefits, so it’s important to check the full definition if you are close to the limit.

I am in individual pay as you go (PAYG) earner who has a private vehicle that is used for work purposes. I use the logbook method to claim a deduction for all costs related to the vehicle (85 per cent business usage per the logbook). The vehicle is about nine years old and when it was purchased was well above the luxury car limit. The written down value (WDV) of the vehicle is about $15,000, but I could easily sell it for $70,000.

I am looking to sell the vehicle and I can’t seem to find a straight answer on whether a balancing adjustment is required. I understand a balancing adjustment is required for business, but I am an individual. Is an individual required to make a balancing adjustment in these circumstances? If they are, is there an offsetting adjustment that can be made if you purchase a new vehicle over the luxury car limit?

Julia Hartman of Bantacs says a balancing adjustment is required if you have been claiming depreciation. There is no offset for the new vehicle, though you will be able to claim some depreciation on it. Your own accountant is the best person to advise you.

I recently read your book Wills, Death & Taxes and found it both excellent and thought-provoking. One issue I’d like your view on concerns a power of attorney making a withdrawal from super on behalf of the donor if death is imminent, to reduce the so-called “death tax”. If the member has lost capacity and the power of attorney (POA) enacts the withdrawal, could this raise ATO concerns about whether the benefit is for the member or the attorney’s own benefit? Do you recommend including a conflict-transactions clause in the POA to deal with this?

Making a withdrawal from superannuation for the purpose you describe should not trouble the tax office. Even though an attorney must never act for their own benefit, the reality is that a conflict can happen with the best of intentions.

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A recent case came to my notice where the home was in the name of the husband, and the wife was the attorney. The husband had lost capacity, and they needed to sell the family home held in his name and transfer the money to her name – which of course she could not do, unless there was a conflict clause in the document.

Ideally, the power of attorney should include a conflict clause to authorise the attorney to act. If the existing document does not have such a clause and the donor has already lost capacity, the practical option is to proceed with the withdrawal and deposit the proceeds into the fund member’s own bank account. That ensures the benefit remains with the member and not the attorney.

Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: [email protected]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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