With deposits stretching beyond what most young Australians can save in under a decade, the "Bank of Mum and Dad" has become one of the country's biggest lenders. For many families, helping the kids into a home is one of the most meaningful things their money will ever do.
But there is a hard truth underneath the generosity: your children can borrow for a house, while you cannot borrow for your retirement. Help that is structured badly — or sized emotionally rather than mathematically — can undo decades of careful planning.
Start with what you can genuinely afford
Before discussing how to help, work out how much help your retirement can absorb. That means modelling your projected income and capital through retirement — including aged care and health contingencies — and only then seeing what surplus exists.
This is the step families most often skip. A gift that feels affordable at 58, while salaries are still flowing, can look very different at 78. An adviser can model the long-term impact of a specific dollar figure in an afternoon; guessing gets expensive.
Know your options — they carry very different risks
The main ways parents help each have distinct trade-offs:
Document everything, even within family
The most painful outcomes we see are rarely caused by markets — they're caused by handshake arrangements meeting divorce, death or insolvency. An undocumented "loan" is legally a gift, and in a property settlement half of it can walk out the door with a former in-law.
A simple loan agreement, a registered second mortgage or caveat, and updated wills for everyone involved turn goodwill into something that survives bad luck. It isn't a sign of distrust; it's what protects the family relationship when circumstances change.
Mind the pension and aged care flow-ons
Money given away doesn't just leave your balance sheet — it can change your Age Pension assessment, your aged care means testing and the estate you eventually leave. Centrelink's gifting rules count excess gifts as deprived assets for five years, and lump sums out of super have their own timing considerations.
The order and timing of help — before or after retirement, from super or from savings, as a gift or as a loan — can change the outcome by tens of thousands of dollars. This is precisely where personalised advice earns its fee.
Key takeaways
Any investment information and general advice displayed or given on this website does not take into account any person's personal objectives or financial situation. You should consider the general advice having regard to your own circumstances.
