Multi Generational Planning

Legacy in the making: Lance and his girls. What if your greatest gift to your kids isn’t just what you leave behind — but how you help them grow it now? Learn how smart Aussies are using their children’s super to build lasting family wealth.

Written by Lance Swansbra

Using Your Kids’ Super to Build Family Wealth: The Overlooked Strategy for Well Off Australians

When most well off Aussies think about using super for wealth creation, they’re thinking about their own nest egg — tax savings, retirement income, estate planning, and the like.

But here’s a powerful (and often missed) strategy:

What if you could use your children’s super accounts to help grow your family’s long-term wealth — and reduce tax along the way?

In this article, we’ll unpack how smart, older Australians are using their kids’ super as a strategic tool to build intergenerational wealth, improve tax efficiency, and lock in financial security for the decades ahead.

1. Why Think Beyond Your Own Super?

If you’re retired and have built substantial wealth, chances are:

• Your own super is already near or above the Transfer Balance Cap ($1.9M per person in pension phase)

• You’ve got surplus income or investment assets outside super (potentially paying tax on the earnings at 32%+)

• You want to start supporting your children — or at least setting them up for long-term success

The trouble is, just gifting them money now often means:

• The funds get spent or poorly managed

• You lose control

• There's zero tax benefit

That’s where contributing to their super becomes an elegant solution. You’re giving them a long-term boost, locking funds in a tax-advantaged environment, and creating wealth that can benefit not just your kids — but potentially their kids too.

2. The Tax Case for Super Contributions to Adult Kids

Here’s how it works:

• You gift or loan (more about this later) funds to your adult children

• They make contributions into their own super (perhaps concessional or non-concessional)

• That money grows inside super at just 15% tax on earnings (or 0% once they retire)

• Over the years that’s a serious compounding edge

Example:

Tom and Mary are in their 70s, they each hold over $2m in super and also have money invested outside of super where the earnings are being taxed at 32% p.a. They have 2 adult children and decide to gift each of them $50k p.a. over the next 10 years. Each of the children add the $50k to their super each year. Each of the children use a portion of the $50k to maximise their concessional contributions, which helps them to reduce their tax bills and also increase their retirement savings.

Fast forward 10 years, assuming 7% p.a. returns:

• Each child has increased their retirement savings by around $570k

• That’s over $1.1 million in family wealth, growing in a tax-advantaged environment

• If invested outside super, you’d lose thousands to tax over that time

• In addition, the use of concessional contributions has helped the children to reduce their personal tax bills by around $6k p.a. each, or roughly a total tax saving of $120k over 10 years

• Last but not least, Tom and Mary have also reduced their personal tax bills by funding the gifts from money they hold outside of super

  You’ve essentially bought your kids an extra million-dollar retirement fund — without it touching their bank account or lifestyle today.

3. Contribution Limits: What You (and They) Need to Know

Before you go transferring half your share portfolio to the kids, let’s talk rules.

Concessional Contribution Cap

• $30,000 p.a. (remember employer super contributions count towards this cap, for example if your child is earning a wage of $100k p.a. they’ll already be using $11.5k of this cap, increasing to $12k from 1 July 2025)

• These contributions are tax deductible and get taxed at 15% when entering super. Generally speaking, if someone is earning more than $45k p.a., concessional contributions will be worthwhile considering

• If your child has less than $500,000 in super, they may be able to use carry forward concessional contributions to add more than $30k of concessional contributions.

Non-Concessional Contribution Cap

• $120,000 per financial year

• Or use the bring-forward rule to contribute up to $360,000 in one hit (if under 75 and their total super balance is below $1.9 million)

• No tax deduction provided, but also no tax to pay when being added to superannuation

Key Requirements:

• Your children must opt-in and make the contribution themselves

• They need to meet eligibility criteria (age, super balance limits, etc.)

• You can gift them the funds, or structure it as a loan (if you want some strings attached)

• Sometimes people think there’s tax rules that prevent gifting. There’s no tax rules that prevent gifting, although Centrelink do have rules around gifting.

4. Super is a "Family Trust on Steroids" — But with a Lock

Think of super like a long-term family trust:

• It’s tax-efficient

• It's generally protected from bankruptcy and lawsuits

• And it compounds quietly in the background

Yes, the trade-off is that it’s locked up until preservation age (currently 60 for most). But that’s a feature, not a bug, when you’re trying to build long-term family wealth.

It prevents your kids from accessing large sums too early, and ensures the money is used for what it’s intended: future security.

5. Should You Gift or Loan the Funds?

There are two main approaches:

Option A: Outright Gift

• Simple and clean

• Funds are theirs to contribute

• You lose control — but no repayment expected

Option B: Private Loan Agreement

• Keeps some control and protection in place

• Can include terms like repayment only after retirement or upon sale of assets

• Still allows your children to contribute to super, but with a paper trail

A loan agreement can be handy if you’re worried about future divorce settlements, business risks, or simply want more say over the terms. We’d recommend you work with a lawyer to structure this properly.

We’ve seen clients gift large sums only to have them caught up in messy relationship breakdowns later. Structure protects everyone.

6. Strategic Benefits for the Whole Family

Let’s zoom out and look at the bigger picture benefits:

✅ Massive Tax Arbitrage

Moving funds from your name (where they might be taxed at up to 47%) to your kids’ super (15% tax) is a huge win.

✅ Asset Protection

Super is generally protected from bankruptcy and legal claims — an underrated benefit for kids in business or high-risk industries.

✅ Future Estate Planning Flexibility

By building your kids’ super now, you may be able to:

• Reduce their reliance on future inheritance

• Equalise estates between children (especially in blended families)

• Avoid large taxable death benefits from your own super down the track

✅ Compounding Timeframe

If your kids are in their 30s or 40s, they still have 20–30+ years of compound growth ahead. Every $100k you help them contribute now could be worth $280k+ by retirement.

7. What If Your Kids Can’t Contribute Right Now?

In some cases, your adult kids:

• Don’t earn enough to justify salary sacrificing

• Are focused on mortgage repayments or family expenses

• Just aren’t that financially engaged (yet)

That’s where you can step in and help them make contributions.

Even modest amounts — $10k–$20k a year — can snowball into serious outcomes over time. And it builds the habit of future-focused financial thinking.

This also opens the door for intergenerational conversations about wealth, values, and legacy — something that’s often just as important as the dollars themselves.

8. Can This Be Combined with Other Structures?

Absolutely. This strategy often works alongside family trusts, testamentary trusts, and investment companies. Here’s how:

• You use a trust to manage investment income now

• Distribute funds to adult children

• They contribute that to super

• You reduce family group tax AND build future wealth

It’s all about smart cashflow routing — not just growing assets, but growing them in the right places.

9. Don’t Forget to Talk Strategy (Not Just Tactics)

This isn’t about “putting money into super because it’s a good deal.”

It’s about designing a strategy that supports your family’s goals — whether that’s financial independence, generational security, or giving your kids the confidence to take risks (like starting a business or working less when they have young kids).

Super is just the engine — you still need the roadmap.

10. When This Strategy Doesn’t Make Sense

Let’s be real — this isn’t for everyone. It may not be ideal if:

• Your kids are close to the $1.9M balance cap

• They're not financially mature enough yet

• You have more urgent priorities like meeting your own living expenses, aged care planning, asset protection, or debt reduction

• You want your kids to have access to funds sooner than preservation age (e.g. for a house deposit)

In those cases, putting money into super for your kids probably isn’t going to be the right strategy

Final Thoughts: Play the Long Game with Family Super

If you’ve built serious wealth and want to help your family without handing over the keys too early, your children’s super might just be the most tax-effective tool you’re not using.

It’s smart. It’s simple. It’s powerful.

Done properly, it can:

• Grow millions in future family wealth

• Protect assets from tax and legal risks

• Teach your kids long-term money habits

• Support your legacy without losing total control

Want help building a multi-generational wealth strategy that actually works?
At Braeside Wealth, we help wealthy families use super, trusts and tax planning to support the people they love — without leaving it to chance or the tax office.

Click here to book a 15-minute Good Fit Chat

The information in this article is general information and does not take into account any person’s individual situation. You should always do your own research, or seek professional advice to assist you in making an informed decision about what suits your needs.