Ask Paul: Should I sell my home to save my son's house?

Dear Paul,

I am on a full pension and am aware of elder abuse. My son bought a house recently then lost his job.

Can I sell my house and buy a half share in my son's property without losing my pension? - Lyn

Lyn, your very short question caused me a range of emotions, starting with deep concern and worry. Elder abuse is a dreadful thing and all too common. What is also sad is that many well-meaning parents and good kids go into an arrangement like this and, despite everyone having good intentions, it goes completely pear-shaped.

So, without knowing you, your age, what other assets you have, or anything about your son, every fibre in my body screams out, "DO NOT DO THIS".

My obvious thought is there are a lot of businesses in our economy calling out for workers. Surely your son can get a job. If for some reason your son cannot work, my view would be that he should consider selling his home.

Selling your house is a very generous but very dangerous idea. First, your home is your security. It is a place to live, rent free, and then you have your pension. It also gives you a valuable asset that may also assist you into high care or another retirement living option if that becomes necessary.

In your estate, it can also be left to your son, giving him a home at a point in the future.

Another critical point is that its sale, depending on the value, can absolutely impact your pension. Not only would the half you keep become an asset under the age pension assets test, income you earn from the money could also impact your pension.

Finally, the amount you give your son above $10,000 in the first year, and $30,000 over five years, will be caught under the "deprivation" rules. This would be a disaster for you. The amount you give your son above the limit would be deemed to be still yours, so your pension would be reduced or potentially lost entirely because of money you have given away and no longer control.

Lyn, please do not even think about selling your house without talking to Centrelink, seeking professional advice and a solicitor. And even then I cannot possibly see how that advice would be that selling your home is a sensible idea.

You would risk your long-term security and sacrifice a tax-free property that is "assets test exempt" for the pension, and possibly losing your entire pension. This is not only your home, it is your future security.

The focus here should be on your son taking one of the hundreds of thousands of available jobs, casual or permanent. If that is not possible, if a property has to be sold, logic says that would be his, not yours. Not only could you lose your home, you could lose your pension.

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