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It can be hard to see someone you care about struggling financially. Older people often get asked to help when family members are in difficulty and it’s sometimes hard to say no. Whether you have a lot to give or a little, it’s important to know your rights and responsibilities and what can go wrong when you help someone financially.
This Help Sheet covers what you should think about when considering a loan or gift of money or other assets. It also covers going into debt for someone, going guarantor and providing security for a loan.
At Seniors Rights Victoria we work with many older people whose efforts to help someone financially have resulted in the devastating loss
of their home and/or savings. In older age it can be impossible to recover from a financial loss, particularly if you are on a fixed income such as
a pension.
Before you agree to help someone out financially, ask yourself:
Someone who is unable to get the money they need from a bank or other lender is probably considered too risky for a loan. Ask yourself if you should take this risk. Think carefully about the person’s financial habits and methods. Even the most well-meaning and financially competent of people can make mistakes. Circumstances such as a relationship breakdown or job loss can bring big changes to a previously secure situation.
It can be difficult to say ‘no’ to someone you care about, particularly if they are going through difficult times or are used to getting your financial support.
