One Family Strategy That Secured Two Financial Futures

Introduction

Major life transitions rarely happen in isolation. For families navigating divorce, ageing, and caregiving responsibilities at the same time, financial decisions can quickly become overwhelming.

At Heard Financial, we regularly work with families facing complex, emotionally charged circumstances — where the right advice needs to consider not just numbers, but relationships, security and long-term wellbeing.

This case study highlights how a carefully structured, compassionate strategy helped an elderly mother protect her Age Pension and financial independence, while simultaneously enabling her son to build meaningful retirement security — all during a period of significant personal upheaval.

A Look at the Situation

The mother was an elderly Age Pensioner who was in the process of navigating a divorce later in life. As part of the settlement, the family home was required to be sold, leaving her without a permanent place to live and facing uncertainty about how she would fund her future living arrangements.

Once the divorce settlement was finalised, she was expected to receive approximately $900,000. While this provided financial opportunity, it also introduced significant risk. Holding this level of assets in her own name would likely result in the loss of her Age Pension, which was critical in meeting her everyday living expenses.

The client was not comfortable living alone in the future and expressed a strong desire to live with her son while she still had the physical ability to do so.

Her son, who is single, owned his home outright and had been providing care for his mother during her separation. However, he had limited superannuation, worked in a casual capacity due to caring responsibilities, and had little confidence that he would be able to fund a comfortable retirement.

Both mother and son were deeply concerned about their financial futures — and unsure how to structure their situation without compromising security on either side.

What Needed to Be Solved

The family faced a highly complex, multi-layered challenge:

• The mother risked losing her entire Age Pension upon receiving the divorce settlement
• She needed a stable, supportive living arrangement without living alone
• The son wanted to continue caring for his mother but lacked the financial capacity to build his own retirement
• Any transfer of funds needed to comply strictly with Centrelink rules to avoid adverse assessments

Without specialist advice, there was a real risk of:

• Permanently losing pension entitlements
• Creating cashflow pressure for both parties
• Missing opportunities to build long-term wealth in tax-effective structures

Our Strategy to Move Forward

At Heard Financial, our role in situations like this is to bring clarity, structure and calm to what can otherwise feel like an impossible set of decisions.

We began by carefully analysing the impact of the divorce settlement on the mother’s Age Pension entitlements and assessing how Centrelink would treat the funds under different scenarios.

To reduce assessable assets while preserving financial security, we implemented a multi-step, coordinated strategy:

Step 1: Downsizer Super Contribution

Upon receipt of the settlement proceeds, we arranged for the mother to make a $300,000 downsizer contribution into a newly established superannuation account. These funds were invested conservatively in line with her risk preferences, allowing her to benefit from a concessionally taxed environment.

Step 2: Strategic Property Ownership

Maintaining the remaining funds in the mother’s name would have significantly reduced — or eliminated — her Age Pension. To address this, we arranged for an independent valuation of the son’s home.

Using this valuation, the mother purchased 50% ownership of the property at market value, paying $600,000 from her settlement funds. The property title was changed to Joint Tenants, ensuring that upon her passing, full ownership of the home would automatically revert to her son.

Because the transaction was completed at arm’s length and at market value, it was accepted by Centrelink and allowed a substantial portion of assets to move from being assessable to non-assessable.

Step 3: Building the Son’s Financial Future

The son received $600,000 from the transaction. With careful planning across financial years, he was able to contribute $480,000 into superannuation, dramatically improving his retirement position, while retaining additional cash to support living costs as a full-time carer.

Coordinated Support Behind the Scenes

To ensure the strategy was implemented smoothly and compliantly, Heard Financial:

• Worked directly with Centrelink to confirm the treatment of the property transfer
• Coordinated with the conveyancer to ensure the title change was completed accurately and efficiently

This proactive coordination removed administrative stress from the family and reduced the risk of costly errors or delays.

Clarity, Security and Stability Achieved

Through Heard Financial’s structured advice, both mother and son achieved outcomes that protected their futures:

• The mother retained and increased her Age Pension
• Her annual pension income rose from $23,101 to $30,646
• She secured stable housing with her son and long-term financial certainty
• The son’s superannuation increased from $141,000 to $621,000
• He gained peace of mind knowing his mother was financially secure

Most importantly, the strategy strengthened the family’s ability to support one another — without sacrificing financial independence.

Why This Strategy Made a Meaningful Difference

Without advice, the mother’s pension could have fallen to $0 following the settlement.

Instead, careful structuring:

• Preserved government benefits
• Optimised superannuation opportunities
• Protected assets across generations
• Ensured compliance with Centrelink rules

This is the type of planning that requires both technical expertise and a deep understanding of real family dynamics.

Emotional Relief Through Clarity

Divorce later in life is emotionally confronting — particularly when combined with concerns about ageing, housing and financial security.

Through Heard Financial’s advice:

• The mother gained confidence that she would remain financially independent
• She retained dignity, choice and ongoing care from her son
• The son gained reassurance that his mother’s future was secure — and that his own retirement was no longer at risk