The hidden $140 billion economy helping some Australians get ahead

From free childcare to home deposits, groceries and holidays, billions of dollars are flowing between Australian generations long before an inheritance is handed down.

For Shane and Catherine, being grandparents to 10 children can sometimes resemble a full-time job.

A busy week can involve seeing one or more of their grandchildren almost every day, from picking them up from school, taking them to sport, helping with homework and cooking for them.

The couple, who have both worked as educators for 45 years, made a conscious decision to become active grandparents.

Catherine even reduced her working hours so she could help care for their grandchildren while their parents worked full-time.

"They couldn't have managed five days a week childcare. It's so expensive today," Catherine told SBS's Insight.

"So to look after the children, that's a saving in hundreds of dollars for them."

There may be no money changing hands, but the arrangement has significant financial value.

And Shane and Catherine are part of a much bigger, and often largely invisible, flow of support between Australian generations.

What is the 'Booster Economy'?

New research from SBS CulturalConnect estimates older Australians provide more than $140 billion worth of everyday financial support to younger family members each year.

The research involved in-depth interviews with 50 parents and grandparents providing support, followed by a survey of around 2,500 Australians.

More than 12 million Australians were found to support younger adult family members in some way.

Researchers have dubbed it the "Booster Economy", or the wealth and financial support flowing between generations while parents and grandparents are still alive.

And it extends far beyond the familiar "Bank of Mum and Dad" helping children into the housing market.

Among those providing support, 34 per cent had bought groceries for younger family members, 33 per cent had paid for restaurant meals and 30 per cent had bought clothes.

Almost one in five had paid for travel, while 14 per cent had bought a car and the same proportion had purchased appliances or electronics.

Forty-two per cent had provided cash, while 19 per cent had helped pay off debt.

The $140 billion estimate excludes cash transfers, debt repayments, homes and home deposits, capturing instead the scale of everyday purchases being made by older Australians for younger family members.

The Bank of Mum and Dad is getting bigger

Finder personal finance expert Sarah Megginson said its research suggests reliance on family wealth is already growing significantly in one of the biggest areas of household finances: housing.

Finder recently found 30 per cent of homeowners surveyed had received family assistance to purchase their property.

Contributions towards a deposit were the most common form of support, while 8 per cent said their family had paid for their home outright.

But Megginson said the change over time was particularly striking.

"About four years ago, those stats were looking like 10 per cent — like one in 10 were getting help from their parents," she told SBS News.

"Last year it came back around 20 per cent ... and now we're at three in 10.

"So we've just seen that trend continue to get even deeper year on year."

Megginson said older Australians were increasingly seeing the financial pressures facing their children and grandchildren and reconsidering when they passed on their wealth.

"Instead of the more traditional path of leaving an inheritance after they've gone, they've actually started, I guess, releasing it early," she said.

While housing deposits were a major example, Megginson said parents were also contributing towards expenses such as private school fees and other significant lifestyle costs.

From inheritance to everyday expenses

Megginson said the financial relationship between parents and their adult children had also changed considerably within a generation.

"I'm in my 40s, and I moved out and bought my first home in my early 20s, and that was the end of any kind of money relationship with my parents," she said.

"I was a grown-up then, paid for all of my own things."

But Megginson said younger colleagues in their 20s and 30s had described parents continuing to pay for things such as restaurant meals, or covering the cost of their children and their partners joining family holidays.

"I think that has been a huge generational shift," she said.

Housing affordability was one of the major forces behind the change, Megginson said, with the gap between incomes and property prices widening significantly over recent decades.

She said she increasingly heard from Australians who believed that without an inheritance or help from their parents, they would "simply never own a home".

Finder research has also found one in 10 Australians say they will need an inheritance to achieve a major financial goal, such as buying a property.

What if your parents can't afford to help?

But access to the Booster Economy is far from universal.

The SBS research highlights a stark difference between younger Australians whose families can provide significant support and those without the same financial safety net — including some who instead provide support to older relatives.

The consequences can extend beyond the immediate value of the help.

Regular free childcare, for example, can save a family hundreds of dollars a week while allowing parents to remain in the workforce. Help with groceries or bills can leave more income available for other expenses, while a home deposit can provide a pathway into a property market that might otherwise be out of reach.

Megginson said she grew up in a family that lived "pay to pay", without generational wealth to pass down.

"If you don't have generational wealth coming your way, if you're not lucky enough to be one of those 8 per cent of people who have got a house bought for them, what can you do to try and build wealth for yourself and get yourself in a better financial position?" she said.

Is financial independence changing?

Australia is also approaching a massive transfer of accumulated wealth, with previous estimates suggesting Australians aged over 60 could pass around $3.5 trillion to younger generations over two decades.

But the Booster Economy suggests some of that transfer is already happening — one grocery shop, childcare day and house deposit at a time.

Megginson believes financial pressures could even change how Australians think about independence.

While adult children remaining at home well into their 20s can sometimes be viewed as having failed to "fly the nest", she noted multigenerational living is already commonplace in many cultures.

"We might see a trend that is driven by finances to more embrace that style of living," she said.

"It might have some of those cultural benefits, and ... the whole 'it takes a village to raise a family' philosophy might start to flourish a little bit more."

For some Australians, that village is increasingly providing an economic safety net too — one that can look very different depending on the family you're born into.

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