As a result of dwindling housing affordability in many parts of Australia, many parents and grandparents are being coerced into downsizing prematurely by children and grandchildren eager to enter the housing market, numerous sources claim.
“We’re seeing this kind of inter-generational financial abuse really growing,” said Meagan Lawson, CEO of the Council on the Ageing (COTA) NSW. “It starts as, ‘Can I borrow?’ But over time it becomes quite abusive where people feel they have to give money to keep harmony in the family.”
The growing phenomenon of “inheritance impatience” can have dire consequences for the elderly, Lawson warns. Some are forced into retirement villages too early, while others are “persuaded” to sell their homes, hand over the proceeds to their heirs, and move in with family.
In worst-case scenarios, the situation can quickly break down, and the elderly can find themselves homeless.
According to a new survey from multinational law firm Slater and Gordon (which polled 1,000 Australians), 26% of Aussies aged 16-34 said they would need to rely on, or have already relied on, an inheritance to enter the property market.
This reliance on wealth transfer from the older generation to secure housing is having a profoundly negative impact on family dynamics, said Lara Nurpuri, associate at Slater and Gordon.
“We have seen many instances where [disputes over inheritance have] prompted family members to challenge their siblings or other relatives for a bigger piece of the pie, or created tensions that have led to estrangements where inheritances are reduced, or children are cut [out] of wills completely,” she said.
An even darker side of the trend is emerging in the form of “inheritance conservation”.
Kerry Marshall, manager of the NSW Elder Abuse Helpline and Resource Unit, says the number of calls to helplines have spiked. A growing sense of entitlement, particularly from millennials, means many heirs feel they have a right to their parents’ money.
“Here, the adult children want to preserve their parents’ money for themselves, so they aren’t spending any of it on the care of their parents, and we’re seeing a lot of neglect linked to this financial abuse,” Marshall said.
According to Faith Hawthorne, lawyer at Justice Connect, financial abuse of the elderly is the most common type of abuse being reported.
“The most common scenarios are where there’s been misuse of their power of attorney or where an older person sells their property or mortgages it, giving the sales proceeds or the equity in their home to their son or daughter,” Hawthorne said.
“They might do this in the expectation that their child will then be providing care for them in return, but often this isn’t discussed in any detail beforehand, and sometimes it doesn’t happen, or arrangements break down.
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