What is the Home Equity Access Scheme
The Home Equity Access Scheme lets eligible older Australians access the equity in their home or other Australian real estate through an Australian Government loan. It was previously known as the Pension Loans Scheme.
Participation is voluntary. Participants in the Scheme can choose to receive fortnightly payments to supplement their regular income or a lump sum advance.
Consider your needs
You should consider getting independent financial advice before applying. Visit the Services Australia website to learn more about what do to before you apply.
You may also want to speak to a Services Australia Financial Information Service Officer. They can give you information to help you work out what’s best for you. This is a free service.
Contact Services Australia on 13 23 00 or visit the Services Australia website to find out more about Financial Information Services Officers.
Eligibility
The Scheme is available to pensioners and non-pensioners aged over Age Pension age. Visit the Services Australia website to find out if you are eligible for the Scheme.
Security for the loan
A person must offer Australian real estate they own or co-own as security for the loan.
For a property to be suitable, a person must have their name on the title for the land. This ensures the security is likely to be adequate over the long term and that the debt can be recovered.
Visit the Services Australia website to learn more about the loan terms and conditions.
Receiving loan payments
The loan payments you can receive depend on whether you get a pension payment or not.
The Scheme allows you ‘top up’ any pension payment you receive up to a maximum of 150% of the maximum pension rate. If you receive the maximum rate of pension, you can get another 50% of that rate as a loan. If you do not receive any pension, you can get the full 150% as a loan. Participating in the Scheme does not affect your pension, and only the ‘top up’ amount counts as a loan. Participants can also access up to 2 lump sum advances in any 26-fortnight period.
Visit the Services Australia website to learn more about how much you can receive.
Calculating interest
Compound interest is charged on a person’s Scheme debt and will accumulate throughout the life of the loan.
The payments will accrue as a debt secured against the participant’s nominated Australian real estate. This debt will accrue interest. Visit the Services Australia website for the Scheme’s current interest rate.
Managing the loan
Maximum limits
There are safeguards limiting the maximum loan a person can accrue. The total amount a person can borrow through the Scheme depends on the value of the property. It also depends on the equity they wish to keep in the property and their (or their partner’s) age.
Repaying the loan
The loan is generally recovered on the sale of the secured property (unless transferred to a new property) or from the person’s estate. Voluntary repayments can be made at any time.
A no negative equity guarantee ensures participants will not need to repay more than the equity in the property they used to secure their loan.
Visit the Services Australia website to learn more about managing your loan.