Helping now or helping later

Many veterans want to help their children or grandchildren get ahead – with a home deposit, education costs or simply a buffer. The first decision is timing.

• Helping now lets you see the difference your support makes, and can come when your family needs it most – often when they’re buying a first home or raising young children.
• Helping later, through your will and super, keeps your options open and protects your own security, but money often arrives when your children are already in their fifties or sixties.

Many families do a mix of both. Whatever you choose, it’s worth planning it deliberately rather than responding to requests one at a time.

Gifting and your Centrelink or DVA payments

If you receive, or expect to receive, an income support payment such as the Age Pension, DVA service pension or income support supplement, gifting rules apply. A gift includes giving away money or assets, or selling something for less than it’s worth.

• You can gift up to $10,000 in a financial year, with no more than $30,000 over five financial years, without it affecting your payment.
• These limits apply to a single person or to a couple combined – not per person in a couple.
• Amounts over the limits are treated as a deprived asset: they still count under the assets test, and are deemed to earn income, for five years from the date of the gift.
• Services Australia and DVA apply the same limits, so the rules matter whichever agency pays you.

Gifting rules don’t stop you giving; they just mean a large gift could reduce your payment for a while. If you might claim a pension within the next five years, gifts made now can still count.

Helping your children into their first home

Home ownership is where most families want to help. Common approaches include:

• A gift – simple, but once it’s given, it’s theirs, and it may be exposed if their relationship ends.
• A documented loan – a written loan agreement, ideally prepared by a solicitor, records the amount, any repayment terms and what happens on sale, separation or death.
• Going guarantor – using equity in your home to support their loan. If they can’t pay, the lender can call on you, potentially putting your own home at risk. Get independent legal and financial advice first.

Government schemes may reduce how much help is needed:

• Since 1 October 2025, the Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit without paying lenders mortgage insurance. Places are uncapped, income caps were removed and property price caps were raised. A single parent stream allows a deposit as low as 2%.
• The First Home Super Saver (FHSS) scheme lets first home buyers make voluntary super contributions of up to $15,000 a financial year and $50,000 in total, and later release them (with associated earnings) towards a first home.
• If your child is in the ADF or has served, DHOAS may also be available.

Eligibility rules and price caps change, so check the current details with the scheme and a lender before relying on them.

Protecting gifts if a relationship breaks down

If you give your child money and their relationship later ends, that money may be treated as part of the couple’s shared property. It’s a difficult topic to raise, but one many parents regret not addressing.

• A written loan agreement, signed at the time the money is provided, gives stronger evidence that the funds were a loan rather than a gift.
• Some families consider security, such as a registered mortgage, or ask the couple to consider a binding financial agreement.
• How any of these are treated depends on family law and the circumstances, so legal advice is essential.

Education, trusts and longer-term help

Some families set aside money for grandchildren’s education or future. Options range from savings in a parent’s or grandparent’s name, to education funds, to a family trust. Trusts can offer flexibility in who benefits and when, but come with set-up and running costs, tax rules (including special rules for income distributed to minors) and legal obligations. They generally suit larger amounts or more complex situations and should be set up with an accountant and solicitor.

A testamentary trust in your will is another way to provide for grandchildren or vulnerable family members after you’re gone.

Super, inheritances and estate equalisation

For many retirees, super is one of the largest assets left behind – and it can be taxed when it passes to adult children.

• Adult children are often not dependants for tax purposes unless they were financially dependent on you. The taxable part of a lump sum can then be taxed at up to 15% (taxed element) or 30% (untaxed element), plus Medicare levy if paid directly. Military defined benefit schemes may include untaxed elements.
• Some people look at strategies such as withdrawing and recontributing super, or drawing it down over retirement, to reduce this tax. These strategies have eligibility conditions and trade-offs, so personal advice matters.
• Estate equalisation means keeping things fair when children have received different amounts during your life – for example, one child was helped with a deposit and another wasn’t. Your will can take earlier gifts or loans into account, but only if they’re recorded.

Our guide to estate planning for veterans covers super nominations and death benefit tax in more detail.

Talking to your family

Money conversations can be awkward, but silence tends to cause more trouble later. It can help to:

• explain what you’re able to do, and what you need to keep for yourself
• be clear whether help is a gift or a loan, and what happens if circumstances change
• treat children consistently, or explain why you’re not
• let family know who your adviser and solicitor are, and where your documents are kept.

Things to weigh up

• Your own retirement first – how long your savings need to last, possible aged care costs and the value of your DVA or Centrelink entitlements.
• Gift, loan or guarantee – each offers a different balance of simplicity, control and risk.
• Timing – gifting limits, pension eligibility and when your family actually needs support.
• Fairness between children, and between children from different relationships.
• Tax on super and investment income passing to the next generation.

Common mistakes to avoid

• Giving away more than you can afford and relying on the pension to make up the difference.
• Making large gifts without checking the effect on your Centrelink or DVA payments.
• Handing over money with no written record, then being unable to show it was a loan.
• Going guarantor without understanding that your own home may be at risk.
• Assuming adult children receive super tax-free.
• Not updating your will to reflect help you’ve already given.