A recent article by Anthony Keane in The Australian highlighted the growing risks parents may face when providing significant financial support to adult children.
Many parents and grandparents reach a point where they want to use their wealth to help the next generation. That support might involve contributing towards a first home, funding education, helping establish a business or providing relief from financial pressure. Done thoughtfully, it can create meaningful opportunities for children and grandchildren while allowing families to see the benefits of their wealth during their lifetime.
However, financial support can also create unexpected risks. A generous decision made today may reduce the income and flexibility available later in retirement, affect estate plans or create tension between family members.
“At Halpin Wealth, we often work with clients who are in a position to help their children and genuinely want to do so,” says Sam Nunn, Financial Adviser & Partner.
“The important question is not simply whether they can afford the initial payment. It is whether they can still fund the retirement, lifestyle and future care needs they have planned for.”
Helping with a home purchase
The property market can be difficult for younger Australians to enter, which is why many parents consider helping with a deposit. Before transferring funds, it is important to be clear about what the assistance is intended to achieve and whether it will be treated as a gift, loan or shared investment.
A direct gift may be simple, but once the money is transferred, parents generally lose control over how it is used or whether it will ever be returned. A documented loan may provide greater clarity and protection, particularly if the child later separates from a partner or experiences financial difficulty.
“Informal arrangements can work while everyone agrees,” Sam says.
“Problems often arise years later when circumstances change, and family members remember the arrangement differently. Clear documentation helps protect both the financial contribution and the family relationship.”
Professional legal advice may also be required to ensure the arrangement is appropriately documented and considered within the family’s broader estate plan.
Giving more than your retirement can sustain
Parents are often willing to make significant sacrifices for their children. Retirement, however, can last for several decades and may include rising healthcare, home support or aged care costs.
A gift that appears affordable today could limit your choices later, particularly if market conditions, health needs or family circumstances change.
Before providing substantial financial support, it can be helpful to model how the decision may affect:
- Your expected retirement income
- Your ability to meet future healthcare or aged care costs
- Your investment and superannuation balances
- Your eligibility for government benefits
- The financial buffer available for unexpected expenses
“There is little benefit in helping your children today if it means becoming financially dependent on them later,” Sam explains.
“Our role is to help clients understand what they can comfortably provide while protecting their own long-term security.”
Paying off a child’s debt
Clearing credit card balances or personal debt can provide immediate relief, but repeated assistance may prevent the underlying problem from being addressed.
If financial support becomes expected, adult children may become increasingly reliant on their parents and less confident managing setbacks themselves.
In some cases, a better form of support may involve helping the child create a repayment plan, obtain appropriate advice or establish clearer financial habits.
“Support does not always need to mean paying the bill,” Sam says.
“Helping someone understand the issue and build a plan can create a much stronger long-term outcome than repeatedly providing cash.”
Where parents do decide to assist, it may be useful to set clear limits and expectations from the beginning.
Overlooking legal and family consequences
Large gifts and loans can become complicated when relationships change.
For example, funds contributed towards a property may not remain protected if the child separates from their spouse or partner. Ambiguity about whether money was gifted or loaned may also lead to disputes with other family members.
Differences in the level of support provided to each child can create further tension, particularly when parents later pass away and estate arrangements are reviewed.
Equal treatment is not always practical or appropriate. One child may require more support than another. Clear communication and careful estate planning can help ensure those decisions are understood.
“Family disagreements often come from surprises rather than the financial decision itself,” Sam says.
“Talking openly about your intentions and documenting them properly can prevent confusion and resentment later.”
Giving with confidence
Helping your children can be one of the most rewarding uses of your wealth. The strongest outcomes usually come from balancing generosity with structure.
Before making a significant contribution, consider:
- Whether your own retirement remains secure
- Whether the money is a gift, loan or investment
- How the arrangement will be documented
- Whether the support may affect family law, tax or Centrelink outcomes
- How it fits within your estate and intergenerational wealth plan
A coordinated approach involving your financial adviser, accountant and lawyer can help ensure your support creates the outcome you intended.
Source acknowledgement: This article was adapted from “How giving money to your children could put your retirement at risk”, written by Anthony Keane and published in The Australian on 22 July 2026.
Support their future while protecting yours
Providing financial support to your children should strengthen your family’s position, not place your own retirement at risk. Halpin advisers can help you model the long-term impact of a gift or loan, consider how it fits within your estate plan and structure assistance more clearly.
Contact us before transferring significant funds so you can support the next generation with confidence while preserving your own financial security. Contact us today.
This information provided in this article is general advice only and has been prepared without taking into account your own objectives, financial situation or needs. Before making a financial decision based on this advice, you must consider whether it is appropriate in light of your own needs, objectives, and financial circumstances, and where relevant, obtain personal financial, taxation or legal advice. Where a financial product has been mentioned, you should obtain and read a copy of the Product Disclosure Statement (PDS) prior to making any decisions about whether to acquire a product.