It’s been just over three months since Payday Super began on 1 July 2026. For most employers, super guarantee now has to reach each employee’s fund within seven business days of payday. Paying at the end of the quarter no longer cuts it.
The first real test lands on 28 October 2026.
Which ATO risk group are you in?
Under the ATO’s first-year compliance approach, PCG 2026/1, employers are broadly sorted into three groups:
Low risk: you pay with each pay run and fix any late payments promptly.
Medium risk: you’re still paying quarterly or catching up, but every July–September shortfall is cleared within 28 days of quarter end.
High risk: any September-quarter shortfall is still outstanding after 28 October. These employers are first in line for ATO review.
28 October is also the standard due date for the July–September quarterly BAS, so it’s a busy fortnight.
Three things worth doing now
Reconcile July–September payroll against what your clearing house and funds actually received.
Chase any rejected or misallocated contributions.
Check that your payroll software and bank timing can reliably meet the seven-business-day window.
Welcome to my weekly Insights blog. Each week, we look at a topic in wealth creation, super, estate planning or tax. This week we look at how to protect your family’s wealth when your children’s relationship breaks down.
You’ve spent a lifetime building your wealth, and you want it to help your children. But if a child’s relationship breaks down, money you gave them, or left them, can end up in the property pool and be split with their former partner. This is wealth destruction.
It’s an uncomfortable topic, and most families avoid it. Yet roughly one in three Australian marriages ends in divorce, and de facto couples face the same property rules. A little planning now can make a big difference to what stays in the family.
Key takeaways
Under the Family Law Act, gifts and inheritances are not automatically protected. The Family Court can include them in the property pool or take them into account when dividing it.
An outright gift, such as a home deposit, usually becomes part of the couple’s shared property very quickly.
A binding financial agreement (BFA) is the most direct way for a couple to agree what’s excluded, but it must meet strict legal requirements.
Keeping wealth in a family trust or a testamentary trust, where your child is a beneficiary but doesn’t control the trust alone, can give strong protection.
Lending money instead of gifting it, with a written loan agreement and ideally security, can let the money be treated as a debt owed back to you.
Why an inheritance isn’t automatically safe
Many people assume an inheritance or a gift from mum and dad stays with their child if the relationship ends. That isn’t how Australian family law works.
When a married or de facto couple separates, the court looks at everything either of them owns, whoever’s name it’s in. It then considers each person’s contributions and future needs to decide a fair split. An inheritance is usually treated as a contribution by the child who received it, but it can still be shared.
Timing matters. Money received late in a relationship, and kept separate, is more likely to stay with your child. Money received early and mixed into a joint home or bank account is much harder to protect.
Your four main options
Option
How it works
Level of protection
Watch out for
Outright gift
You transfer money or assets to your child
Low
Becomes your child’s property and is easily mixed with their partner’s
Documented loan
You lend the money under a written agreement, repayable on demand and ideally secured by a mortgage
Medium to high
Must be a genuine, enforceable loan, not a gift in disguise
Family or testamentary trust
Assets stay in a trust and your child receives distributions
Medium to high
Weaker if your child controls the trust on their own
Binding financial agreement
Your child and their partner agree in writing what’s excluded if they separate
High, if done properly
Strict legal formalities; can be set aside in some cases
Binding financial agreements
A binding financial agreement, sometimes called a “prenup”, is a contract between your child and their partner under the Family Law Act. It sets out how property will be dealt with if they separate. It can be signed before the relationship, during it, or after a separation.
A BFA can specifically exclude gifts and inheritances from family, so it’s the most direct protection available. But it only works if it’s done properly:
Each person must receive independent legal advice before signing, and their lawyer must sign a certificate confirming it.
Both people should fully disclose their finances.
Neither should be pressured into signing, especially close to a wedding.
Even then, a court can set a BFA aside in some situations, such as fraud, unconscionable conduct, or a major change involving the care of children. A BFA is something your child arranges with their partner and their own lawyer. As a parent, your role is to raise it early and, where appropriate, make it a condition of significant help.
Trust distributions versus outright gifts
Instead of handing over a lump sum, many families keep wealth inside a trust and let children benefit from it over time.
Family (discretionary) trusts. Assets held in a discretionary trust don’t belong to any one beneficiary. Your child has a hope of receiving distributions, not a right to the assets. This generally makes them harder for a court to treat as your child’s property.
Testamentary trusts. A testamentary trust is created by your Will. Instead of your child inheriting directly, their share goes into a trust they can benefit from. A well-drafted protective testamentary trust can help keep the inheritance out of reach of a former partner, and it can offer tax benefits too.
The catch is control. The High Court has made clear that if one spouse effectively controls a trust, its assets can be treated as their property. If your child is the sole trustee and appointor, the protection is much weaker. Many families share control with a sibling or another trusted person, or hand control to the child gradually.
Even where trust assets aren’t treated as property, a court may still see regular distributions as a financial resource of your child. That can affect how the rest of the pool is divided, so a trust reduces risk rather than removing it.
Loan-back strategies: lend, don’t give
The “bank of mum and dad” is one of the biggest sources of home deposits in Australia. If you help a child buy a home, consider lending the money instead of gifting it.
A genuine loan is a debt your child owes back to you. If they separate, the debt can generally be deducted before the pool is divided. For the loan to be taken seriously, it should:
Be in writing and signed at the time the money is advanced, ideally by both your child and their partner.
Be repayable on demand, so you can call it in if needed.
Be secured where possible, for example by a registered second mortgage over the property.
Be treated like a real loan. Record any repayments or interest, and review the agreement every few years so it doesn’t lapse under limitation laws.
Courts look closely at family loans. An undocumented “loan” that nobody ever expected to be repaid is usually treated as a gift. The more it looks like a commercial arrangement, the stronger it is.
The same idea can apply to an inheritance. A testamentary trust can lend funds to a beneficiary for a home purchase rather than distributing capital outright, keeping the asset in the trust.
Tax and Centrelink points to keep in mind
No gift tax. Australia has no gift or inheritance tax, but giving away an asset other than cash, such as shares or property, can trigger capital gains tax and stamp duty.
Centrelink gifting rules. If you receive, or may soon receive, the Age Pension, gifts above $10,000 in a financial year or $30,000 over five years count as your assets for five years. A loan isn’t a gift, but Centrelink still counts it as your financial asset.
Trust distributions must be real. A distribution to an adult child should genuinely benefit that child. Distributions that are really enjoyed by someone else can attract ATO attention under section 100A.
Frequently asked questions
Is an inheritance protected in a divorce in Australia?
Not automatically. The Family Court can include an inheritance in the property pool. It’s usually treated as a contribution by the person who received it, and it’s more likely to stay with them if it was received late in the relationship and kept separate.
Should I lend or gift my child a home deposit?
If protecting the money matters to you, a properly documented loan is generally safer than a gift. Put it in writing, make it repayable on demand, and consider securing it with a registered mortgage over the property.
Does a testamentary trust protect an inheritance from a child’s divorce?
It can help significantly, especially if your child doesn’t control the trust on their own. The court may still take the trust into account as a financial resource, so it reduces the risk rather than removing it entirely.
Can parents make their child sign a binding financial agreement?
No. A BFA is an agreement between your child and their partner, and each must get independent legal advice. Parents can encourage one, or make financial help conditional on it, but pressure on either partner can make the agreement easier to overturn.
Plan the conversation, not just the paperwork
The best protection usually combines a few of these tools: a Will with testamentary trusts, family loans that are properly documented, and an open conversation with your children about why it matters. Done early and explained well, it’s about protecting the whole family, not about distrusting anyone.
At TaxAssist Accountants Dee Why, we work alongside your estate and family lawyers on the tax and structuring side, including trusts, loan arrangements and the Centrelink impact of gifting. Call us on (02) 9045 1511 or email [email protected] to start the conversation.
This article contains general information only and does not take into account your personal circumstances. It is not legal or financial product advice. Family law and estate planning arrangements should be prepared by a qualified lawyer.
The kids have moved out, the garden takes all weekend, and the stairs aren’t getting any easier. Plenty of long-time Northern Beaches homeowners are thinking about selling the family home and moving somewhere smaller.
If that’s you, there’s a super rule worth knowing about before you sign anything: the downsizer contribution.
What is a downsizer contribution?
It lets eligible people aged 55 or older put up to $300,000 from the sale of their home into super. A couple can contribute up to $600,000 between them.
The big advantage is that it doesn’t count towards your concessional or non-concessional contribution caps. That’s useful for people who would otherwise struggle to get much money into super later in life. Once inside super, investment earnings are taxed at no more than 15%, and can be tax-free once you move into a retirement income stream (within limits).
Despite the name, you don’t have to buy a smaller home. You don’t have to buy another home at all.
Who’s eligible?
You need to meet all of these conditions:
You’re 55 or older when you make the contribution. There’s no upper age limit and no work test.
You or your spouse owned the home for at least 10 years.
The sale qualifies at least partly for the main residence CGT exemption.
You make the contribution within 90 days of receiving the proceeds, which is usually settlement day.
You give your super fund the ATO’s Downsizer contribution into super form before or at the time you contribute.
You haven’t made a downsizer contribution before. It’s a once-in-a-lifetime opportunity.
Your spouse can also make a downsizer contribution even if they weren’t on the title, as long as the other conditions are met.
Traps to watch for
The Age Pension assets test. Your home is exempt from the assets test, but money in super generally isn’t once you reach Age Pension age. Moving sale proceeds into super can reduce or remove a pension entitlement.
It isn’t tax deductible. It’s a top-up to your retirement savings, not a way to reduce this year’s tax.
The 90-day deadline is easy to miss. Settlement, moving and buying a new place all happen at once. Check that your fund can accept the contribution well before settlement.
You only get one go. Think about timing, how much to contribute and which spouse contributes before you act.
Plan before you list
The best time to think about a downsizer contribution is before the property goes on the market, not after settlement. It’s also a good moment to check who would receive your super if something happened to you, because super doesn’t automatically follow your Will. We cover that in Part 3 of our weekly Insights series.
Thinking about selling the family home? Get in touch with our team in Dee Why to talk through the tax and super side before you sign.
This article is general information only and isn’t personal tax or financial product advice. Whether a downsizer contribution suits you depends on your circumstances, so please seek advice from us and a licensed financial adviser before acting.
Here’s a simple weekend project: pick one job you hate doing every week, and try handing it to an AI tool.
You don’t need to be technical. Most of today’s AI tools work by simply typing or talking to them.
Practical examples for local businesses
Tradies: describe the job out loud in the ute, and have AI turn it into a written quote to check and send.
Cafés: paste in this week’s specials and get social media posts written in your own style.
Physios and personal trainers: turn rough session notes into a clean summary or home program, with names and personal details removed.
Retailers and service businesses: let your accounting software read supplier invoices and suggest how to code them, so bookkeeping takes minutes instead of hours.
Two rules to follow
Protect personal information. Never put TFNs, bank details or clients’ personal information into a public AI tool.
AI drafts, people check. Use AI for the first draft, and have a person review anything before it goes to a customer, supplier or the ATO.
The businesses that benefit most from AI won’t necessarily be the biggest. They’ll be the ones that use it to free up time for customers and for running the business.
Many business owners are discovering this at tax time: interest the ATO charges on late or unpaid tax is no longer tax deductible.
Since 1 July 2025, the general interest charge (GIC) and shortfall interest charge (SIC) can’t be claimed as a deduction. That applies even if the debt relates to an earlier year. GIC also compounds daily, so the cost grows quickly.
The 2025–26 tax return is the first where most businesses will feel the change. If you’ve been using the ATO as a cheap overdraft, it isn’t cheap anymore.
What you can do
Pay down the ATO debt first if you can. The sooner it’s paid, the less interest accrues.
Keep any payment plan as short as possible. Interest keeps accruing while you’re on a plan, but a plan stops debt recovery action while it’s being managed.
Compare a business loan. Interest on borrowings used in your business can still be deductible, so refinancing the debt may cost less after tax. Get advice first.
Ask about remission. If something genuinely went wrong, you can still ask the ATO to reduce or cancel the interest.
Seasonal cash flow? Plan ahead
Tradies, builders and hospitality businesses on the Northern Beaches often have lumpy cash flow, which is when tax debts tend to build up. Setting aside GST and PAYG in a separate account each week, and planning for quieter months, is the simplest way to avoid paying non-deductible interest.
