Australian has kept a tighter rein on expenditure on the elderly than perhaps any other modern welfare state. This chapter argues that the fate of the family is bound up with the structure of the welfare state and with the issue of intergenerational equity. Discussion of the place of the family in contemporary society and in public policy is difficult for a number of reasons. The argument so far may have helped to account for family change, but it has done so by relying heavily on the apparent enigma of generational transformation. The optimistic view has been that the family is diversifying but not declining. The evidence here indicates that family structural change has involved serious decline in children's socialization. The transition from one welfare state to the other coincides with the revolution in the family. A welfare system designed originally for widows and deserted wives became for many a substitute for marriage.