Help or hindrance? There are differing views about parents’ cash handouts.

From paying bills and university fees to buying household goods and even homes, it’s been labelled as “sponge society”.

But others say it simply reflects parents transferring their wealth earlier in life, when children need it more.

It also has created a large group of young adults who feel guilty about receiving the handouts.

Comparison website finder.com.au surveyed more than 2000 people and found that 74 per cent of parents say they are giving financial help to their children aged over 18, while 28 per cent of recipients say they are embarrassed or ashamed about it.

DEBT BURDEN

Bessie Hassan, PR Manager & Consumer Advocate.Source:Twitter

Spokeswoman Bessie Hassan said rising property prices, large tertiary education debts and the growth of unpaid internships were driving the giveaway.

“Many parents want to help their children but they are never going to learn the true cost of living if they are constantly receiving handouts,” she said.

“If you insist on giving money to your child, consider making it a loan, with strict conditions on when and how it is to be paid back.

“Some children may feel embarrassed to receive financial help from their parents because it strips them of their financial independence and it may make them feel inadequate if they have to rely on the bank of mum and dad.”

The Finder research described Victoria as the biggest “sponge state” with 65 per cent of adult children saying they receive financial help, while South Australians were the most independent. Queenslanders were the most embarrassed about receiving money from parents.

FAMILY WELFARE

Social researcher Mark McCrindle said young Australians should not feel guilty about accepting financial help.

“I think they should receive it with grateful thanks and hopefully have an attitude of passing it on themselves one day,” he said.

Mr McCrindle said there had been social change in recent decades and parents no longer saved to leave a large estate for their children.

“Now it’s reversed and the giving of money takes place when the children are younger and need it,” he said.

“The cost of living has never been greater, generations have never started working later in life, and they are starting in debt.

“It’s never been harder to get established, and parents are realising that it was easier in their day.”

Mr McCrindle said Baby Boomers represented one-quarter of the population but owned half the nation’s wealth.

They have an average net wealth of $1.2 million.

“The Baby Boomers were born at a lucky time and have had 50 years of an economic miracle, free degrees and tripling house prices,” he said.

“It’s not the young ones sponging — it’s intergenerational wealth recycling.”