Caring for an ageing parent can have financial consequences long before it becomes an obvious line item in the household budget.

It might begin with paying for groceries or transport, helping with medical expenses or contributing to home modifications. Later, there may be larger decisions about Support at Home services, residential aged care or whether one family member needs to reduce their working hours to provide support.

These costs can gradually become part of an adult child’s finances before the family has had a chance to plan for them.

That can put two financial priorities in conflict: meeting a parent’s needs today while continuing to build enough wealth to support your own household and retirement.

The starting point is to understand what the help will cost, what your parents can contribute and where your own financial limits lie.

Start with the full financial picture

Before deciding what you can afford to contribute, establish what your parent’s financial position actually looks like.

That includes income, savings, superannuation, investments, property and existing expenses. It also means understanding the type of care required and how long that care might reasonably be needed.

Aged care isn’t a simple matter of picking a facility and paying a fixed fee. For residential aged care, what a person pays depends on their circumstances, income and assets, the fee and accommodation arrangements that apply and the provider they choose. A means assessment helps determine whether they are eligible for government assistance with accommodation and what contributions towards their care may apply.

This is where aged care financial advice can be useful, particularly when a family is weighing different ways of funding accommodation or ongoing care.

The rules changed on 1 November 2025 when the new Aged Care Act commenced. People who were already in permanent residential care before that date generally remain on their existing fee arrangements unless they choose to opt in to the newer arrangements. However, fee and accommodation arrangements are treated separately and a person’s accommodation arrangements can change in some circumstances.

Understanding which rules apply should come before deciding how much the family needs to contribute.

Decide what you can afford without putting your own finances at risk

There is no universal amount that an adult child should contribute to a parent’s care. The appropriate figure depends on income, assets, debt, family circumstances and proximity to retirement.

A useful starting point is to separate the costs into three categories:

1. what the parent can meet themselves
2. what the family may choose to contribute
3. what you can afford personally.

That last category can easily get overlooked.

Someone with a mortgage and children may have a very different capacity to help from someone who owns their home outright and is several years from retirement. A contribution that appears manageable now may become difficult if it continues for five or 10 years.

Good financial planning looks past the immediate expense to the effect on the household as a whole – cash flow, debt, savings and future retirement income.

Siblings don’t always agree on who should pay what. Family financial planning can help put some structure around those conversations by clarifying what each person can realistically afford and how different arrangements may affect them.

Be careful about sacrificing your retirement savings

One of the more consequential decisions is whether to use your own savings or change your retirement strategy to meet a parent’s needs.

There may be circumstances where doing so makes sense. But it should be treated as a financial decision rather than an automatic obligation.

Reducing retirement savings can have a lasting effect because money that is withdrawn from investments or no longer contributed is no longer available to compound. Someone approaching retirement has less time to rebuild that capital than someone in their 30s or early 40s.

The same applies to contributions. If caring responsibilities lead to reduced working hours, extended leave or an earlier exit from the workforce, the impact may extend beyond the immediate loss of income. Superannuation contributions may fall at the same time.

Accessing super itself is a separate issue. Australia has strict rules about when super can be withdrawn, so helping a parent financially does not in itself provide a right to access super early.

For superannuation planning in Australia, the broader question is how family support could affect the amount you are able to contribute and the retirement savings you ultimately build.

If you’re closer to retirement and looking at retirement planning on the Gold Coast, it can also be useful to factor possible family support into your projections rather than assuming all of your savings will be available for your own needs.

That may mean reviewing retirement savings strategies before making a significant commitment to ongoing family support.

Understand the aged care implications before moving assets

A family member can pay some or all of an older person’s aged care accommodation costs. But the way the payment is structured can have consequences, so it is worth understanding those consequences before money changes hands.

Under the current rules, a refundable accommodation deposit (RAD), or refundable accommodation contribution (RAC), is counted as the resident’s asset for the aged care means assessment, even if the money is provided by a family member.

For residents covered by the 1 November 2025 accommodation arrangements, providers generally retain 2% a year from the RAD or RAC balance for up to five years. The remaining balance is refunded when the person permanently leaves care, less any other permitted deductions.

There’s also a practical deadline to know about. Services Australia requires relevant changes to a person’s personal or financial circumstances to be reported within 28 days, as those changes can alter the amount they contribute towards aged care.

This is exactly the kind of detail aged care financial planning is designed to help families navigate. Before selling a property, transferring money or paying a substantial accommodation amount, it is worth understanding how the transaction could affect aged care fees, government support and the finances of the people involved.

For more complex situations, aged care financial advisers can help families understand the financial consequences of different arrangements before they commit to them.

Do not forget the estate planning questions

An ageing parent moving into care can also prompt questions about Wills, superannuation and who will ultimately receive their assets.

Those decisions should be considered separately from the immediate cost of care.

A Will does not automatically determine who receives a superannuation death benefit because super generally sits outside the estate. The outcome depends on the fund’s rules and any valid beneficiary nomination. Super can also be paid to the deceased’s legal personal representative, in which case it becomes part of the estate and the Will can determine how it is distributed.

The tax treatment of a death benefit can also depend on who receives it and whether they are considered a dependant for tax purposes.

That makes it worth checking whether existing beneficiary nominations still reflect the parent’s intentions and family circumstances.

It is also worth considering whether the family has made assumptions about an eventual inheritance that could influence decisions being made today. An asset may need to be sold or used to fund care, and its future value should not be treated as guaranteed.

This is where wealth protection strategies can extend beyond investments and insurance. Asset ownership, beneficiary arrangements and estate planning can all affect how wealth ultimately passes through a family.

Keep your own financial plan running

Family responsibilities can make long-term planning feel less urgent. Someone may decide to reduce their superannuation contributions for a few years, postpone investing or use savings that had been earmarked for a future purpose.

Sometimes that is necessary. The important point is to make the decision consciously and understand its cost.

For households already managing a mortgage, school or university expenses and other commitments, budgeting and cash flow advice can help establish whether a contribution is sustainable. The question is not simply whether there is enough money this month, but whether the arrangement remains workable if circumstances change.

This can be particularly relevant when providing financial advice for women and financial planning for women. Women continue to shoulder a significant share of caring responsibilities, and periods of reduced work or time out of the workforce can affect both current income and future superannuation.

For some families, this becomes a broader question of wealth management: how to meet an immediate family need while continuing to protect long-term financial goals.

The longer the period of care, the more important it becomes to revisit the numbers rather than relying on the original arrangement.

Have the conversation before there is a crisis

Financial decisions are easier when families have time to consider them.

An adult child may know that a parent wants to remain at home for as long as possible, for example, but not know whether the parent has the resources to pay for additional support. Another family may discover only when residential care becomes necessary that siblings have very different expectations about who should contribute.

A conversation about the parent’s preferences, financial position, home, superannuation, insurance and estate planning can remove some of that uncertainty.

It does not require a detailed plan for every possible future event. It does require enough information for the family to understand what decisions may lie ahead.

For adult children, financial planning for parents is less about predicting exactly what will happen and more about understanding what resources are available before circumstances force a decision.

Protecting both generations

Caring for an ageing parent can have a significant financial effect on the next generation, particularly when care continues for several years or coincides with the adult child’s own transition towards retirement.

The most useful starting point is to look at both sides of the equation: what the parent has available to fund their care and what the adult child can contribute without undermining their own financial position.

Aged care fees, superannuation, property, tax and estate planning can interact in ways that are not always obvious. Getting the facts before making a major financial decision can prevent a short-term solution from creating a longer-term problem.

For anyone trying to balance family responsibilities with their own longer-term plans, professional financial advice can help work through those trade-offs and assess the options available to both generations.

Ready to talk it through? Get in touch with our team at RFS Advice for a no-obligation conversation about your family’s situation.

Frequently asked questions

Should I use my own savings to pay for my parent’s aged care? Can helping my parents affect my retirement? Can a family member pay for a parent’s aged care accommodation? Should my parents review their Will and superannuation nomination? When should I seek professional advice?

General advice warning:

The information and any advice provided in this article has been prepared without taking into account your objectives, financial situation or needs. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things.