Unspoken debt: The young migrants paying their parents' bills

Children from migrant backgrounds feel strong financial obligations to their parents. The way they reconcile these commitments with Australia's money culture can be challenging.

When Pakistan-born Fyzee Nauman finished university and settled into his first full-time job,  his father asked him to help support the household he shares with his parents and sister.

"Together with my sister, we split the bills based on income," he says.

"At one point, I was making more than my sister, so I would pay 70% of the household bills and she would contribute 30%, while Dad would cover the mortgage."

Fyzee first began contributing to the family's finances when he started working in a casual job after high school.

"During that time, my parents asked me to contribute to grocery bills and things like that. It wasn't a strict commitment but it was expected that I would be able to contribute. I was okay with it," he says.

At first, it was a bit tough as he wanted to spend his new income on himself.

"Some Western families would typically ask kids to pay rent. For us, it was never a rent commitment, but it was expected that we would contribute here and there for bills and other expenses."

Fyzee is among many first-generation immigrants living in Australia who are expected to continue the financial obligations that are the norm in their country of origin.

According to the Australian Bureau of Statistics (ABS) between 2000 and 2021 Australia became home to three million permanent migrants: 15% from India, or 439,700 people, followed by China with 334,900 and the UK with 277,500.

Money goes both ways

While intra-household wealth is a reality for many migrants from non-English-speaking backgrounds (NESBs), it's rarely talked about publicly and no data exists.

Supriya Singh, adjunct professor of sociology at Melbourne's La Trobe University, says in the communities of the Global South (developing countries), which includes countries in Latin America, Africa, the Middle East, Asia and Oceania, money flows in two directions.

"It flows from parents to children and from children to parents. For communities in the Global South, money ... is a medium of care," she says.

Singh, whose research has been published in A Research Agenda for Financial Resources Within the Household, found that sharing money across generations and households, which includes aunts, uncles and cousins, is accompanied by a "morality of money" issue that reflects attitudes about what is a good parent or child.

The economic climate in Australia has seen housing affordability for young people become a big issue and a near impossible goal without the Bank of Mum and Dad. Singh says there is a lot of talk about parents giving money to their children to pay for housing in Anglo-Australian families, it is not a new phenomenon in middle-income households from the Global South.

"Generally, parents with Indian, Asian and Pacific backgrounds have helped fund their children's housing. The children in return help their parents in old age," she says. "But in today's discussion of how parents help their children with housing, there is no talk of how the children will help their parents."

Wealth as a family unit 

Fyzee and his sister, who is also employed, are now at a stage where their incomes are roughly equal, so they now halve the bills.

"We've been doing that consistently for the last couple of years and it works out fine," he says. "If my sister and I are making a big financial decision or purchase, we still talk about it with our parents," he says. "I still get advice from my dad to see if it's the right call or not. I very much look at wealth as a family unit and I see it through the lens of my own personal achievement."

When cultures clash

Singh says Anglo-Celtic families usually calculate how much they can afford to give their kids while funding their own retirement.

They don't tend to openly talk about money with their children; it is more likely to be a private conversation between a couple. They don't ask their children, for example, 'How much have you saved?'

"But this is slightly changing as more families need to talk about finances when it comes to buying the children's first home," she says.

"This shift is taking place in Anglo-Celtic money culture because children cannot afford to buy a house on their own and therefore the parents have to step in."

Rana Ebrahimi, the national manager of the Multicultural Youth Advocacy Network (MYAN), says most of the young people she works with live in an intergenerational household. Many stay at home to support their parents by paying for themselves while sharing the household expenses.

"Then the parents focus on paying the mortgage and other household expenses. In some traditional households, children happily give their entire income to their parents and then it will be [re]distributed to them. But that's becoming less common," she says.

Tension can arise when traditional expectations collide with an adopted country's mainstream values. "When young people move here, they see that they have the right to their income and start to reduce their contribution," says Ebrahimi.

Sense of belonging 

The cost of living combined with cultural norms has seen the growth of extended families living under one roof.

UNSW research shows that between 1986 and 2011, the number of people living in multi-generational households increased by close to one million, or 30%. Today, about one in five Australians lives in a multi-generational household, typically in a house in a city.

More recent research found that the high cost of living has prompted greater numbers of young adults to stay at home. Data from the Household, Income and Labour Dynamics in Australia survey found that 54% of young men and 47% of young women aged 18 to 29 still live with their parents.

Meanwhile, ABS data shows that the number of three-generational households increased from 275,000 in 2016 to 335,000 in 2021.

However, the economic climate isn't deterring young first-generation migrants from aiming for property ownership, says Ebrahimi. "As migrants, when they come to this country, they want to have a piece of land for themselves because it's a sense of belonging," she says.

"They want to have a ceiling over their head and security. It's a common goal of many migrants or refugees when they arrive in Australia."

Once these adults get into the property market, they often receive financial support from their parents, if their finances allow. "New arrivals ... have less opportunity to get support from their parents unless their parents already own their own house."

All part of the aged-care plan

The issue of parental aged care adds a layer of complexity for children from a NESB because in some cultures putting loved ones in a nursing home is frowned upon. The expectation is that children become the parents' carers.

Manisha Bhudia, a financial adviser at Perth-based Ultimum Financial Services, says her parents were forced to retire in midlife to care for their ageing parents.

"They left my two brothers and I in Kenya and moved back to India. The mindset at that time was that having kids was the aged-care plan; and somewhat [of] an investment plan," she says.

"Once the parents stop working, the expectation is that the children will take care of them financially. The aged-care plan is entrenched in the culture and if the children don't abide by it, then there's 
a lot of shame."

Singh adds that many Asian parents who have aged in Australia are in the same boat as Anglo-Celtic parents when it comes to budgeting for how much they can give their children while funding their retirement.

"Traditionally, [Asian parents] would give to the children, assuming the children will help them when they need it," she says.

Not having enough in retirement savings is a big concern for migrants from a NESB. Research from the Association of Superannuation Funds of Australia (ASFA) found that women are likely to be worse off, as those aged 55 and older retire with a median balance of $120,000 and men $200,000. Compared with the overall population, women retire with $170,000 and men $250,000.

It goes both ways

Bhudia says that while taking care of the parents has an obligatory aspect, it is also done out of love and respect. "But, I saw how financially detrimental it was for my parents," she says.

"The eldest son in our culture, for example, is usually expected to bear the bigger financial burden to the parents. Sending money overseas to parents in the form of remittances [funds sent by migrants to their home countries] is also quite common. There is a sense of pride from parents when they show others in the community that their children are supporting them financially."

Singh's research found that for Asian, African and Pacific families, remittances that go from children to parents are a large portion of the budget. Similarly, money going from parents to children is also a considerable part of the family budget.

In 2023, the World Bank estimated that remittances to low- and middle-income countries reached $US647 billion ($1029 billion). "Remittances are one of the major differences in family finances between communities in the Global South and those in Anglo-Celtic communities. It's money that goes both up and down the generations," says Singh.

Attitudes are changing

For a new generation of migrants, the onus to send remittances to their loved ones has somewhat diminished.

Jason Tian, from China, moved to Australia in 2009 to study a business degree at Melbourne's Monash University and earned two honours degrees afterwards.

He attained a PhD in applied economics and finance and now works as an academic at Swinburne University of Technology, also in Melbourne.

Many migrants like Tian leave their parents in China, however parents may eventually come to live in Australia with their children if permanent residency can be obtained.

"Many of us don't have that strong financial burden of, for example, sending money back to China. To some extent, I think it's the other way around. A lot of young professionals, some even younger than me, might still get financial support from their parents," he says.

"Many Chinese migrants who come here for higher education and end up finding a job here would come from relatively affluent families."

Among his friends, the 37-year-old doesn't know anyone who sends money back to their parents.

Given the cost of living has risen, financial adviser Bhudia notes that the current environment is vastly different to what it was 20 years ago.

"The children's financial obligations to their parents are shifting," says the mother of two, who has a different attitude to family money than her forebears.

"I have freed my children of the financial burdens that were enforced on my parents, and I say to them that I don't expect them to financially support me," she says.

Case study: Son looks forward to 'a bit of separation'

Fyzee Nauman moved to Australia from Pakistan with his family on a skilled visa when he was eight years old and his sister was five.

His father, Nauman Hyderi, an accountant in Pakistan, could not practise in Australia because his qualifications weren't recognised here.

Fyzee recalls that in Pakistan, with extended family support, the family spent more and ate out frequently. When they moved to Australia, they had to cut down and only buy the essentials.

"Now I'm working and my sister's working, we're in a much better financial position and the pressure is off my dad, who was the sole income earner," he says.

"I feel better and freer knowing that my parents don't have to restrict themselves anymore, because for the last 18 years they sacrificed a lot. I want them to enjoy their later years and not have to worry about money."

He is currently living with his parents and sister, but Fyzee often looks to the future. While his parents would prefer his future partner to move into the house, his preference is to move out and create some separation.

"As great as it is living with my parents, being around them, spending time with them and being able to save money, I think moving out is something that is important for personal development and for the potential partner herself," he says.

"My plan is to move out eventually. But, of course, family is still very important and I'll still be contributing after that and helping financially where I can."

They have already discussed his parents' retirement. The plan is for them to focus on paying down the mortgage.

Once his dad hits retirement age and can access his super, the mortgage will be fully paid off, and he will be able to live off the pension without having a big debt.

"But I'll be more than happy to contribute financially, if need be," says Fyzee.

Five tips to help manage family obligations

1. Have the aged-care conversation when parents are still in good health. This is the time to discuss whether living with their children as carers will work.

2. The government's My Aged Care (myagedcare.gov.au) provides help to navigate the aged-care system. The service is accessible via the Translating and Interpreting Service (TIS National) on 131 450.

3. Migrants from a NESB should engage with their super, and consolidate accounts if they have a pension account overseas. They should also check if they are eligible for benefits such as the low-income super 
tax offset (LISTO).

4. Communicate with family overseas about the amount they are receiving via remittances and how often, in order to manage their expectations and set boundaries.

5. In multi-generational households, consider creating a household budget together as a way to encourage conversations about cost-sharing.

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