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Security for Pension Loans

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Security for the loan

A debt arising from a loan is secured by a statutory charge over a person's real assets. The applicant is responsible for the cost incurred by the Commonwealth in placing the charge.

The person has the option to pay the costs up front or to add them to the total loan amount. The subsequent cost of removal of the charge is also borne by the person or their estate upon their death.  The Australian Government Solicitors' (AGS) Office in each state is responsible for the placement and removal of a charge on behalf of the Commonwealth.

Rearrangement of assets

A person may wish to rearrange their assets and consequently it becomes necessary to remove the charge from one property and place it on another. The associated costs of such a change are the responsibility of the person and can be added onto the loan debt. The rearrangement of assets is not an impediment to continuing in the scheme provided the property's value is sufficient compared with the continuing level of debt to allow continuing participation in the pension loans scheme. Unless this condition can be met, a refund of monies should be sought to a level whereby participation for continuing payments under the pension loans scheme is possible.    

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Seeking refund of a debt under the pension loans scheme

5.4.6/Recovery of Debt Prior to Death of Debtor

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If an officer has doubt regarding the security of a debt

Where doubt exists regarding the security of the debt or there are legal issues impacting on such security, details of the case should be referred to the Policy Section of National Office for direction.


Real Assets includes any real estate of the person in Australia (including the principal home) nominated by the person as security but excluding any specified property which the person wishes to exclude. Refer to subsection 52ZAAA(1) for a full definition.