Functional health decline is an important determinant of mental wellbeing in older age. Previous research suggests the important moderating role of social support, and adult children often play a key role in their parent’s support networks. However, previous studies have been limited by cross-sectional designs, possible residual confounding, and very few have considered the role of children’s support. We investigate whether social support moderates the negative effect of physical functional decline on mental wellbeing among older adults and the specific impact of support from and contact with children. We used individual level longitudinal data on 30, 211 men and women aged 65+ in 17 countries from waves 1-6 of the Survey of Health, Ageing and Retirement in Europe. We fitted individual fixed effect models, separately for men and women, which assessed the effect of functional health changes(activities of daily living (ADL) limitations) on quality of life (CASP-12) and depression scores (EURO-D), and tested for moderation by children's support and parent-child contact. Receiving more instrumental support (from anyone) buffered the effect of ADL limitation on wellbeing, and having any children buffered some the effects of ADL limitation on CASP-12. Among parents, there was heterogeneity of effects by gender, baseline health status and intensity of children’s support. For mothers increased child support and contact buffered the effects of functional limitation on wellbeing declines whereas for fathers increased child contact was associated with worsening depressive symptoms. These effects in men are partly consistent with previous studies showing that intense support is associated with poorer mental wellbeing. The effects of having children and of receiving children’s support were stronger in parents with no ADL limitations at baseline. Children and they support they offer may help to offset health related declines in wellbeing, but the effects vary according to gender and parent’s health status.