Financial Advice for Single Parents

Why Single Parents Need Tailored Advice

Single parents face unique financial challenges — relying on a single income, managing childcare costs, and balancing long-term savings with immediate expenses. Good financial advice should recognise these circumstances and provide recommendations tailored to your situation, not generic strategies designed for couples.

Insurance Considerations

As a single parent, your insurance needs are often more critical. Your SOA should address life insurance to protect your children if something happens to you, income protection to cover lost income if you cannot work, and potentially trauma insurance for serious illness. The level of cover should reflect your childcare responsibilities and the financial gap your family would face.

Superannuation and Retirement

Single parents often have lower super balances due to time out of the workforce or reduced income. Your SOA should address strategies to boost your super, such as government co-contributions or spouse splitting (if applicable), and set realistic retirement goals based on your circumstances.

Estate Planning

If you have children, your SOA should discuss estate planning — including a valid will, guardianship arrangements for your children, and beneficiary nominations for your super and insurance. These are critical protections that are often overlooked in generic advice.

Managing on a Single Income

Single parents face the challenge of supporting a family on one income. Budgeting becomes critical. Track your expenses carefully and identify areas where you can reduce costs. Consider whether you can increase your income through career advancement, additional work, or child support payments.

Building an emergency fund is particularly important for single parents — aim for 3-6 months of living expenses. This provides a buffer if you lose your job, face unexpected expenses, or need time off work. Start small if needed and build gradually.

Insurance for Single Parents

Insurance is arguably more important for single parents than couples. If something happens to you, there is no partner's income to fall back on. Life insurance should cover the cost of raising your children to independence. Income protection insurance ensures your family can maintain their lifestyle if you cannot work due to illness or injury.

Review your insurance within super. While convenient, default insurance through super may be inadequate. Consider a combination of super-held and personally-held insurance for optimal cover. Ensure your super beneficiary nominations are up to date to protect your children.

Government Support and Tax Benefits

Several government payments and benefits are available to single parents. Parenting Payment (Single) provides income support if you are the primary carer of a child under 8. Family Tax Benefit provides ongoing assistance with raising children. The Child Care Subsidy helps with childcare costs. Rent Assistance may be available if you rent privately.

Single parents may also be eligible for the Parenting Payment and may receive higher rates of Family Tax Benefit. Check your eligibility through Services Australia. A financial adviser can help you optimise your government benefits as part of your overall financial strategy.

Frequently Asked Questions

Can I access my super early as a single parent?
Early access to super is generally not permitted. However, you may be able to access super on compassionate grounds for specific purposes (medical treatment, mortgage payments to prevent foreclosure). Permanent incapacity or terminal illness also allows access. Seek advice before accessing super early.

How much life insurance do single parents need?
Single parents typically need more life insurance than couples because there is no second income to fall back on. Aim for enough to cover your mortgage, childcare costs, education expenses, and living costs until your children become independent.

What government benefits am I entitled to?
You may be eligible for: Parenting Payment (Single), Family Tax Benefit, Child Care Subsidy, Rent Assistance, and the Medicare Safety Net. Check your eligibility through Services Australia or speak with a financial adviser.

Should I have a will as a single parent?
Yes — a will is essential for single parents. Your will should specify who will care for your children (guardianship) and how your assets will be managed for their benefit. Without a will, the court decides these matters.

AFCA Complaints — What to Know

If you have a dispute with your financial adviser, AFCA provides free independent dispute resolution. In 2023-24, AFCA received 3,559 complaints about investments and advice. The most common issues were inappropriate advice, fees disputes, and poor disclosure. AFCA can award compensation of up to $1 million (with a $5.36 million cap for superannuation complaints). Complaints must be lodged within 6 years of the issue arising.

What Financial Advice Typically Costs

What does advice cost in practice? The typical ongoing fee sits around $4,700–$4,800 a year — a figure that has climbed 67% in five years, though annual growth has cooled to roughly 4%. Starting out, expect an initial Statement of Advice to be priced between $2,000 and $3,500, with specialist hourly rates anywhere from $300 to $600. Since FOFA banned commissions on investment advice, fee-for-service billing has become the norm.