Winning the lottery can be life-changing, but the sudden windfall can have implications for the tax office and Centrelink payments. (Source: The Lott\/Getty) <\/p>\n
Australians lucky enough to win a share of Powerball’s $50 million lottery<\/a> are being warned about how the win could affect their tax<\/a> or welfare circumstances. Whether winners walk away with a few hundred dollars or a few million<\/a>, a sudden windfall can have huge implications, depending on your situation.<\/p>\n First Financial’s James Wrigley told Yahoo Finance<\/a> you should seek out advice from professionals if you win big as they can guide you into divvying up the money wisely before you spend it all. The Australian Taxation Office (ATO)<\/a> said you don’t have to pay tax on your winnings, however, it did reveal where you could be stung down the track.<\/p>\n “Any interest earned on the winnings will need to be included in your assessable income,” it reminded players.<\/p>\n Winners who chuck the money into a bank account could earn a decent chunk of change on top of their jackpot.<\/p>\n For instance, if you were able to theoretically secure a 5 per cent interest rate and walked away with the grand $50 million prize, you would pull in $2.5 million a year just in interest.<\/p>\n But of course that money would be under the watchful eye of the ATO and you’d have to pay tax on every cent in your account.<\/p>\n Do you have a story? Email stew.perrie@yahooinc.com<\/p>\n When you win the lottery, you can sometimes be given a choice on how that money arrives. It can be in a lump sum or spread out over several months or years.<\/p>\n Services Australia usually won’t count the win in its income assessment for Centrelink recipients as it’s considered a freak event that’s unlikely to happen again.<\/p>\n But that’s only if you accept it as a lump sum, and the money could also be included in your asset test.<\/p>\n If you go down the route of regular payments, the government body will view it more like an income stream and that will affect your Centrelink money.<\/p>\n Recipients are urged to alert Services Australia of any changes to their situation.<\/p>\n Good luck.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n