Not that we can afford it, but our son is in a financial dilemma and wondering how we stand if we "loan" him $20,000 with a $5,000 repayment per year all written out so it is clear it is a loan. Note - this is not a gift, but a loan to help him over this hiccup he is in. He will pay back the money, probably quicker than we would request, but how is this seen by Centrelink? 



Best  off getting the right advice from Centrelink Their rules are comples and not alwasys easy to understand

I recently read that lending money to children counts in a similar way to giving money away if you are on a pension.  Those who intend doing this need to tread carefully and seek advice.  Centrelink first and then may be an independent person.

Taking out cash over a period of time would be a better option as not traceable.  That way the rotweilers at Centrelink would not come after you for the peanuts you gave to your needy child.

Good luck.

Any loan you make will still be considered an Asset, so your pension should stay the same. However, you need to inform Centrelink regardless. Are you sure providing a loan to your son is the best course of action if you can’t really afford it. What if you have an emergency and need the money before it’s paid back?

Don't borrow money to lend to your son!

Although you haven't explained what exactly his financial dilemma is it is hard to give you advice on other options.

There's a great probability that he will let you down with another hiccup. How will that affect your financial position since as you stated, "Not that we can afford it"

He needs to negotiate with the source of his financial dilemma and if that is not possible then he needs to take it on the chin and face the consequences. 

In order to offer you advice on other options you need to be clear on what his dilemma is.


Your loan is still an asset so your existing pension should be unaffected. Please ignore those who want to give you gratuitous advice about your family without knowing enough details to make an informed comment. You are the only one who knows your family.

Lots of people think they know their family and lots are also ripped off by them. When asked for a loan you can’t afford it’s only prudent to pause and reflect before proceeding. 

We offered. In past paid back quicker than Flash Gordon. So have no probs just curious. 

You say you 'can't afford it' so why are you even considering giving out a loan? I understand this is your son and you will do anything for him, but he can't afford whatever got him into his mess and you can't afford to get him out of it!

When you ask Centrelink for advice, make sure you also ask whether your pension would be affected if your son defaults on his repayments and effectively you 'lose' that money.

You sound like a very  caring parent, and yes, if your child needs food, shelter and the necessities of life, help.

$20,000 sounds like something to do with a business venture. My opinion for what it’s worth, keep the money for when a real emergency arises.

How old is your son?  Can't he organise his own loan with his bank?

Sorry I wrote anything. I thought this group was caring and informative. I was always taught not to assume. None of you know my situation or son yet some of you assume so much incorrectly. 

If you have a child no matter what age it is normal if you can to offer a helping hand in form of loan because something out of his control happened ... yes ....We loaned him money to buy car years ago and he paid it back quicker than we expected, going without so he could pay it back. 

I did not say I would take out a loan. He would hate that. But if we have the means, although would make things tighter for us for a short time, knowing 100% he will repay it within x time, has responsible job and is so proud.

Sadly lesson learnt for me. Don’t ask advise as people read way too much into a simple question. 

Yes agree some family would abuse the offer. I know he wouldn’t. Shame on you for assuming. 

The problem is ekbg2002 is that you did not ask a simple question at all.

The question you posed is one that many people have had bad experience with and just like you, lent to a child sure in their belief that the child would pay them back, on time, with no problems. Whilst many do, sadly this is not the case in many instances. Hence the warnings for retired people (or anyone really) not to lend their children money especially if doing so will make things financially harder for themselves - as in fact you say it will for you.

You then criticise responders for not knowing your family, the players in the scenario or the circumstances that caused the need for the 'loan'. Yet you posed the question with none of those 'minor' details and expected people to give you the answer you clearly wanted.

I am sorry you did not get what you wanted. But most of the answers were putting you and YOUR declared circumstances above those of an adult child in need of a $20000 loan you say you can ill afford to give.

Your the one who asked for advise with very little information given from you. Of course people will assume about you & your son if this is all the info you gave in your original post, you are a bit ungrateful in your comments to the advice given to you. I doubt allot of people who gave advice to you here are qualified financial advisers (no offence intended to anyone who replied to origional question) so don't get upset if you don't like what people have said in response to your original question. If you want free financial advise from a professional because you can't afford to pay for it go to see a financial councillor from LifeLine. Don't complain about the answers you received from people on here, you asked the question giving very little information about the entire situation in the 1st place & if you didn't want to give full details then you shouldn't have asked for help from complete strangers on this platform.

We got a loan with our bank for our daughter and husband,which is currently $36000 which they pay back monthly. We had to tell Centrelink, we have only been pensioners for 3 years but when the loan was taken out, 10 years ago has come into this. Centrelink had reduced our part- pension because of this loan. We have dicussed this with them and the loan is deemed to be earing interest even though they pay interest. I would not do a loan again and we have learnt our lesson so they have to pay the rest of the loan ASAP so we can then get a higher pension,

Again, it would not be a loan FROM a bank - we would be lending them money in our Bank Account! 

Please delete this, I'm sorry you have gone off a completely different tangent.


Any loan you make to a family member is considered an asset until it is fully repaid, and therefore, will have little or no effect on your Age Pension.

You alone know your son and if you want to help him, go ahead.

I can see no problems ahead for you with Centrelink, but like everything else, it does no harm to still check it out with Centrelink.

Good luck to both of you.

Agree, definitely check with Centrelink.

I'm sure your son has good intentions and would pay you back as soon as he could but the trouble is, we don't know what will happen tomorrow, both for yourself and your son, you may need that money for yourself in the future.  I hope you reconsider.

ekbg2002, has the correct answer to your query.



To make a comment, please register or login

Preview your comment