Granny Flat is the financial arrangement between parent – one or both – and a child or children, where parent is provided with the accommodation and care for exchange for a payment or asset or money transfer to the care provider.

Therefore, we have a family agreement, where mum or dad or both together will transfer the asset, such as their family home or other property or money to a child or children to establish a “granny flat interest”.

Usually that means that the life tenancy of a life interest in the property is being agreed upon between a parent, who is a care recipient, and a child who is a care provider.

As always, Centrelink rules are complex. Normally giving assets to your kids or transferring the property falls under “assets deprivation” and I have been talking about it quite extensively throughout my videos.

This is where the Granny Flat is different. Under this arrangement you are allowed to “give assets to your children” and it will not be treated as deprivation, because it is an exchange of your money for the care and accommodation provided to you by your children.