Section 4AA This Act extends to Norfolk Island.

Section 4A (1) The Secretary may, in his or her discretion, treat an eligible person and the spouse or de facto partner of that eligible person together as an eligible person for the purposes of this Act, and any reference in this Act to an eligible person shall be read as including a reference to a spouse or de facto partner of that eligible person who is so treated.

(3)  The Secretary shall not apply this section in relation to any land, or land and dwelling-house, if the land, or land and dwelling-house, is or are owned or proposed to be owned by the eligible person and his or her spouse or de facto partner otherwise than as joint tenants.

(6) The application of this section in relation to land or land and a dwelling-house does not, except as provided by this section, affect the application of the other provisions of this Act in relation to the land or land and dwelling-house.

Joint ownership

4AB(1) A reference in this Act to any of the following kinds of property:

(a) land;

(b) a suburban holding under the Crown Lands Consolidation Act 1913 of New South Wales, or under that Act as amended at any time, or under an Act enacted in substitution for that Act;

(c) a unit defined in a units plan registered in accordance with a law of the Australian Capital Territory relating to unit titles;

(d) a right of residence in a retirement village;

includes a reference to such property held by a person as a joint tenant or tenant in common;

(2) A reference in this Act to a dwelling-house includes a reference to a dwelling-house that is built in or on land, such a suburban holding or such a unit, that is held by a person as a joint tenant or tenant in common;

(3) A reference in this Act to a purchaser or borrower includes a reference to a person who is a purchaser or borrower as a joint tenant or tenant in common.

Note: Section 17A deals with the issue of certificates of entitlement in relation to joint tenancies and tenancies in common.

Section 15 (1)  A person may apply to the Secretary for any of the following:

...

(b) a certificate of entitlement in relation to subsidy on a subsidised advance that the person may seek from the Bank;

...

(e) a certificate of assignment.

Section 15 (2)  An application shall be in writing in accordance with the appropriate form approved by the Secretary for the purposes of this section and shall be made in accordance with the agreement.

Section 17 (1)  Subject to this Act, the Secretary shall, on application by a person for a certificate of entitlement in relation to subsidy on a subsidised advance that the person may seek from the Bank, issue to the applicant a certificate of entitlement certifying that subsidy is payable by the Commonwealth to the Bank if, in accordance with the agreement, the Bank makes that advance to the applicant or the assignee of the applicant.

Section 17 (2)  A certificate of entitlement issued under this section remains in force until:

(a) it lapses as provided in the agreement; or

(b) subsidy in respect of the relevant advance ceases to be payable under this — Act;

whichever happens first.

Section 17 (3)  A certificate of entitlement issued under this section shall:

(a) specify the maximum amount in respect of which subsidy is payable, being an amount determined under section 25;

(b) specify the maximum term of the advance;

(c) if subsection 34(2) applies - specify the rates of interest and proportions of the further advance to which each of those rates of interest apply, as required by that subsection;

(d) in any other case - specify the rate of interest payable on the advance; and

(da) contain a statement setting out the effect of section 35AA (which, in some situations, reduces the rate of interest payable on a subsidised advance); and

(e) contain particulars of such other matters as are specified in the agreement.

Section 17 (4) A certificate of entitlement issued under this section must:

(a)if the certificate relates to an initial advance, or a further advance, that is not an assigned advance - specify that the advance is for the purposes referred to in subsection 18(2) (other than paragraph 18(2)(1)); or

(b) if the certificate relates to an initial advance, or a further advance, that is an assigned advance - specify that the advance is for the purpose of assisting the assignee of the applicant in obtaining a right of residence in the retirement village in question; or

(c) if the certificate relates to an additional advance that is not an assigned advance - specify that the advance is for the purposes referred to in subsection 18(3) (other than paragraph 18(3)(g)); or

(d) if the certificate relates to an additional advance that is an assigned advance - specify that the advance is for the purpose of assisting the assignee of the applicant in continuing to hold a right of residence in the retirement village in question; or

(e) in any other case - specify the purpose of the advance.

17A(1) The Secretary must not issue a certificate of entitlement under this Part to an applicant if the applicant's interest or right is in the form of a joint tenancy, unless the Secretary is satisfied that:

(a)the application was made by a person and his or her spouse or de facto partner who, under subsection 4A(1), are treated together as an eligible person for the purposes of this Act; or

(b)the only other joint tenant is the applicant's spouse or de facto partner, who is also an eligible person.

(2) The Secretary must not issue a certificate of entitlement under this Part to an applicant if the applicant's interest or right is in the form of a tenancy in common, unless the Secretary is satisfied that the interest or right, at the time when the application was lodged, would have had a value, if it were unencumbered, of not less than the sum of:

(a) all advances in relation to the applicant, in respect of which subsidy is payable; and

(b)the advance to which the certificate would relate.

(3) In this section:

interest or right, in relation to an applicant, means the applicant's interest or proposed interest concerned in respect of a holding, or the applicant's right or proposed right of residence concerned in respect of a retirement village (as the case requires).

Section 18 (1)  Subject to this section, the Secretary shall not issue a certificate of entitlement in relation to subsidy on an advance that a person may seek from the Bank unless satisfied that:

(a)the person is an eligible person, or the spouse or de facto partner of an eligible person who is temporarily or permanently insane; and

(b) the person:

(i)is not the owner of a dwelling-house; and

(ii) does not have a right of residence in a retirement village; and

(iii) does not own an interest in shares giving rise to a company title in respect of land on which a dwelling-house is built;

• other than the dwelling-house, right of residence, or company title in respect of which the advance is payable; and

(c) the person is not liable to repay any amount received by way of assistance under an agreement of the kind known as a War Service Land Settlement Agreement; and

(d) the person has not received money from the Commonwealth after 9 December 1987 by way of:

(i) a payment of a cash grant instead of an advance under this Act as in force on or before that day; or

(ii) a payment instead of such a cash grant; and

(e)if the person has a spouse or de facto partner (other than a spouse or de facto partner from whom he or she is permanently separated) - the spouse or de facto partner:

(i) is not the owner of a dwelling-house; and

(ii) does not have a right of residence in a retirement village; and

(iii) does not own an interest in shares giving rise to a company title in respect of land on which a dwelling-house is built;

• other than the dwelling-house, right of residence or company title in respect of which the advance is payable; and

(f) except in the case of an advance to a person included in paragraph  (b) or (d) of the definition of "Australian Soldier" in section 4 in relation to a house or building used or to be used as a hospital, sanatorium or nursing-home - the dwelling-house or retirement village accommodation in respect of which the advance is payable is intended to be used by the person as a home for the person and any dependants of the person; and

(g) such advance will be secured by:

(i) in the case of an assigned advance - except as provided by the agreement, a first or subsequent mortgage over the assignee's interest in the retirement village and over any other person's interest in the retirement village; or

(ii) in any other case - except as provided by the agreement,  a first mortgage over the person's interest in the holding and over any other person's interest in the holding.

Section 18 (2)  The Secretary shall not issue a certificate of entitlement in relation to subsidy on an advance, other than an additional advance, that a person may seek from the Bank unless satisfied that the advance is for the purpose of enabling the person:

(a) to build a dwelling-house on a holding of the person; or

(b) to purchase a holding and build a dwelling-house on the holding; or

(c)to purchase a dwelling-house together with the holding on which it is built;

or

(d)to complete a partially built dwelling-house on a holding of the person; or

(e) to enlarge, modify or repair a dwelling-house on a holding of the person; or

(f) to discharge any mortgage, charge or encumbrance already existing on the person's interest in a holding; or

(g) to obtain a right of residence in a retirement village; or

(h) to complete the person's partially-built retirement village accommodation; or

(j) to enlarge, modify or repair the person's retirement village accommodation; or

(k)to discharge any debt owed by the person in relation to the person's retirement village accommodation; or

(l) in the case of an assigned advance - to be assisted in obtaining a right of residence in the retirement village.

Section 18 (3)  The Secretary shall not issue  a certificate of entitlement in relation to subsidy on an additional advance that a person may seek from the Bank unless satisfied that the advance is for the purpose of enabling the person:

(a)to enlarge, modify or repair:

(i) a dwelling-house on a holding of the person; or

(ii) a person's retirement village accommodation; or

(b) to meet the cost of roadmaking if the person is liable to meet that cost but is otherwise unable to do so; or

(e)to discharge any mortgage, charge or encumbrance already existing on the person's interest in a holding; or

(f)to discharge any debt owed by the person in relation to the person's retirement village accommodation; or

(g) in the case of an assigned advance - to be assisted in continuing to hold a right of residence in the retirement village.

Section 18 (6)  In this section:

"advance" means a subsidised advance other than a widow or widower advance or an advance for essential repairs.

Section 19  The Secretary must not issue a certificate of entitlement in relation to subsidy on a further advance to a person unless the person is or was a purchaser or borrower in relation to a Corporation advance, a subsidised advance or a contract of sale on or after 9 December 1987.

23A(1) Subject to this Act, the Secretary may, on application by an eligible person (the assignor) for a certificate of assignment, issue the assignor with such a certificate certifying that subsidy is payable by the Commonwealth to the Bank if, in accordance with the certificate, the Bank makes an advance to another person (the assignee).

(2) The Secretary must not issue the assignor with a certificate of assignment unless:

(a) the Secretary is satisfied that the assignee owns or will own a retirement village that:

is primarily for the accommodation of eligible persons; or

is a granny flat; and

(b) the Secretary is satisfied that the assignee will assist the assignor to obtain and continue to hold a right of residence in the retirement village, if the Bank makes such an advance to the assignee; and

(c) the applicant has already been issued with a certificate of entitlement that is in force that:

(i) specifies, under subsection 17(4), a purpose of a kind referred to in paragraph 18(2)(l) or (3)(g); and

(ii) was not issued under section 22; and

(d) a subsidised advance has not been made to the assignor in relation to that certificate of entitlement; and

(e)the assignor and the assignee have agreed to conditions of a kind specified in a determination made by the Secretary under subsection (3).

(3) The Secretary may make written determinations specifying the kinds of conditions to which an assignor and assignee must agree before a certificate of assignment can be issued to the assignor.

(4) A certificate of assignment issued under this section remains in force until subsidy in respect of the assigned advance concerned ceases to be payable under this Act.

(5) A certificate of assignment issued under this section must:

(a) specify the maximum amount in respect of which subsidy is payable, being an amount determined under section 25; and

(b) specify the maximum term of the advance; and

(c) specify the purpose of the advance; and

(d) specify the rate of interest payable on the advance; and

(e) contain particulars of such other matters as are specified in a determination made by the Secretary  under subsection (6).

(6) The Secretary may make written determinations as to the kind of matters to be included in a certificate of assignment pursuant to paragraph (5)(e).

(7) Determinations made under subsections (3) and (6) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.

Section 25 (1)  Subject to this section, the amount that shall be specified under paragraph 17(3)(a) in a certificate of entitlement issued to a person in relation to a subsidised advance that the person may seek from the Bank is:

(a)in the case of an initial advance - such amount as the Secretary determines is necessary to give effect to the purpose for which the advance is made, being an amount that is not more than $25,000; and

(b)in the case of an additional advance - such amount as the Secretary determines is necessary to give effect to the purpose for which the advance is made, being an amount that is not more than the amount by which $25,000 exceeds:

(i)in the case of an assigned advance - the sum of the amounts of the assigned advances made to the assignee in relation to the person; or

(ii)in any other case - the sum of the amounts of the contract of sale, Corporation advance, initial advance or further advance and any previous additional advance made to the person; and

(d)in the case of a further advance - an amount equal to:

(i)the limit of the last Corporation advance, subsidised advance or contract of sale in relation to which the person was a borrower or purchaser, or the assignee of the person was a borrower in respect of the person (as the case requires); or

(ii)$25,000;

whichever is less.

Section 25(1A)  In working out the limit of a person's last Corporation advance, subsidised advance or contract of sale under paragraph (1)(d), the amount of the person's last Corporation advance, subsidised advance or contract of sale is taken to include the amount of any additional advance that has subsequently been made to the person or the assignee of the person (as the case requires).

Section 25(2)  Where an initial advance is made to 2 or more persons jointly (being persons included in paragraph (b) or (d) of the definition of "Australian Soldier" in section 4) in relation to a house or building used or to be used as a hospital, sanatorium or nursing-home, the Secretary may determine a maximum amount under paragraph (1)(a) that is more than $25,000 but shall not determine a maximum amount that is more than the sum of the maximum amounts that could have been determined if the advance had been made to each of those persons separately.

Section 25(3)  Where subsidy is payable for a specified portfolio asset which vests in the Bank under section 6B, the maximum amount in respect of which subsidy is payable is an amount equal to the amount of the outstanding balance under the specified portfolio asset as at the relevant vesting date.

Section 25(4)  Where the outstanding balance of a specified portfolio asset which vests in the Bank under section 6B, or of a subsidised advance, increases as a result of a grant of instalment relief to the purchaser or borrower, the maximum amount in respect of which subsidy is payable for that specified portfolio asset or subsidised advance shall be taken to have been increased by an amount equal to the amount of the increase of that outstanding balance.

Section 26(4)  Where the Commonwealth is paying subsidy in respect of 2 persons and one of those persons becomes the spouse or de facto partner of the other person, the Secretary may, by notice of cancellation given to one of those persons, cancel the subsidy in respect of that person on the date specified in the notice, being a date not earlier than the date of the notice.

Section 31  The rate of interest that shall be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to an initial advance that a person may seek from the Bank is 6.85% per year.

3.

33.1, 2 The rate of interest that must be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to an additional advance that a person may seek from the Bank is 6.85% per year.

34. 3, 4(1) Subject to subsection (2), the rate of interest that is to be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to a further advance that a person may seek from the Bank is the rate of interest per year (disregarding section 35AA) of the last preceding previous advance.

(2) If, at the time when subsidy is or was most recently payable in relation to the last preceding previous advance, subsidy is or was payable in respect of the person in relation to one or more other previous advances:

(a)5 — the rates of interest that are to be specified under paragraph 17(3)(c) in a certificate of entitlement in relation to a further advance that a person may seek from the Bank are the rates of interest per year that applied (disregarding section 35AA) to those previous advances; and

(b) in relation to each such interest rate – the proportion of the further advance to be so specified in relation to that interest rate is the proportion of the sum of amounts outstanding in respect of all the previous advances that are amounts to which that interest rate applies.

(2A) 6 For the purposes of this section, in determining the rate of interest that was payable in relation to a previous advance at any time before 5 January 1998, apply sections 35AB and 35AC as if the application of those sections were not limited to the calculation of interest for 5 January 1998 and later days.

(3) In this section:

• previous advance, in relation to a further advance in respect of a person, means an advance (whether a Corporation advance, initial advance, additional advance or further advance) in respect of which the person is or was a borrower, or a contract of sale, in respect of which the person is or was a purchaser, preceding the further advance in question.

35.7 — The rate of interest that shall be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to an advance for essential repairs that a person may seek from the Bank is 6.85% per year.

35AA.8(1) If the rate of interest payable for a particular month on a subsidised advance, or on an amount owed to the Bank in relation to a specified portfolio asset, exceeds the reduced Benchmark rate, the rate payable for that month is reduced to the level of the reduced Benchmark rate.

(2) The reduced Benchmark rate for the month is the Benchmark rate worked out for the month in accordance with subclause 11.10 of the agreement, rounded up or down to 2 decimal places (rounding 0.005% up), less 1.5 percentage points.

(3) This section applies despite anything in any certificate of entitlement or in any subsidised advance contract or portfolio mortgage, portfolio contract of sale, portfolio supplementary agreement or other portfolio agreement.

35AB.9 (1) If:

(a)a person is the borrower in respect of a subsidised advance or an amount owed to the Bank in relation to a specified portfolio asset; and

(b)apart from this section, a single rate of interest would be payable on the whole of the balance of the advance or amount; and

(c)that rate exceeds 6.85% per year;

the rate of interest payable on the balance is reduced to 6.85% per year.

(2) This section applies despite anything in any certificate of entitlement or in any subsidised advance contract or portfolio mortgage, portfolio contract of sale, portfolio supplementary agreement or other portfolio agreement.

(3) This section is subject to section 35AA (which will sometimes reduce the rate of interest payable to less than 6.85% per year).

35AC.10(1) If:

(a) a person is the borrower in respect of a subsidised advance or an amount owed to the Bank in relation to a specified portfolio asset; and

(b) apart from this section, 2 or more different rates of interest would be payable on different parts of the balance of the advance or amount;

the following single rate of interest is instead taken to be payable on the balance:

(c) if the blended interest rate (see subsection(2)) for the advance or amount is less than 4.5% per year – 3.75% per year;

(d) if the blended interest rate is less than 6.85% per year but not less than 4.5% per year – 4.5% per year;

(e) in any other case – 6.85% per year.

(2) This is how to work out the blended interest rate for the advance or amount:

Method statement

Step 1.For each different rate of interest payable, multiply the rate by that part of the limit of the advance, or of the limit of the amount, on which the rate is payable, and total the results.

Note: However, if that limit is nil, see subsection (4).

Step 2.Divide the total by the limit of the advance or amount.

Step 3.Express the result as a percentage rate per year and round the rate up or down to 2 decimal places (rounding 0.005% up). This is the blended interest rate for the advance or amount (subject to Steps 4 and 5).

Step 4.If:

(a) the result from Step 3 is less than 6.85% per year but not less than 6.67% per year; and

(b)apart from this section, the different rates of interest payable on the different parts of the limit are 3.75% per year, 7.25% per year and 10% per year;

• the blended interest rate is instead 6.85% per year.

Step 5.If:

• (a) the result from Step 3 is less than 4.5% per year but not less than 4.45% per year; and
• (b) apart from this section, the different rates of interest payable on the different parts of the limit are 3.75% per year and 7.25% per year;
• the blended interest rate is instead 4.5% per year.

Note: Steps 4 and 5 are needed because the amortisation of the limit of the advance or amount over the term of the loan or contract can cause small temporary deviations from the average of the various rates of interest over the term. Steps 4 and 5 prevent these deviations from affecting the calculation of the blended interest rate.

(3) This is an example of how to work out the blended interest rate for an advance or amount:

Example: Assume that the limit of an advance is $4,000. Interest is payable at the rates of 3.75% per year on the first $1,000, 7.25% per year on the next $1,000 and 10% per year on the last $2,000 of that limit.

The Step 1 calculations are:

($1,000 x 3.75%) + ($1,000 x7.25%) + ($2,000 x 10%) = $37.50 + $72.50 + $200 = $310

Under Step 2, the $310 is divided by the total limit of $4,000, giving a result of 0.0775.

Under Step 3, that result is expressed as a percentage: 7.75% per year.Step 4 does not apply, because the blended interest rate is too high.Step 5 does not apply, because the blended interest rate is too high and in any event because the rates of interest in question are not the ones specified in Step 5. Therefore, the blended interest rate for the advance is 7.75% per year.

(4) For Steps 1 and 2 of the method statement in subsection (2), if the limit of the advance or amount at the time concerned is nil, then, instead of nil, use the amount of the limit from when the advance was first made, or when the amount first became owing to the Bank.

(5) This section applies despite anything in any certificate of entitlement or in any subsidised advance contract or portfolio mortgage, portfolio contract of sale, portfolio supplementary agreement or other portfolio agreement.

(6) This section is subject to section 35AA (which will sometimes further reduce the rate of interest payable).

(7) If this section would increase the total amount of interest payable on the balance of an advance or amount over the term of the advance or amount, then this section does not apply to that balance.

35AD.11 — Sections 35AA, 35AB and 35AC do not apply in relation to a portfolio contract of sale made as a result of the exercise of a power under section 36 of this Act as in force before the commencing day if, when the contract was made, the purchaser was not an eligible person within the meaning of this Act as then in force.

Section 36 (1)  Subject to section 37, the maximum term to be specified under paragraph 17(3)(b) in a certificate of entitlement in relation to a subsidised advance that a person may seek from the Bank is:

(a)in the case of an initial advance - 25 years;

(b) in the case of an additional advance, ...

(i) a term equal to the unexpired part of the term of the borrower's initial advance, further advance or Corporation advance, or of the purchaser's contract of sale, as the case may be; or

(ii) If the Secretary determines that a longer maximum term would be appropriate, having regard to the circumstances of the case - such longer term as the Secretary determines;

(d) in the case of a further advance:

(i)if the person has ceased to be a purchaser or borrower in relation to the last preceding previous advance - a term equal to the unexpired part of the last preceding previous advance at the time immediately before the person ceased to be such a purchaser or borrower; or

(ii)in any other case - a term equal to the unexpired part of the last preceding previous advance; and

(e)in the case of an advance or a specified portfolio asset transferred to a transferee - a term equal to the unexpired part of the advance or asset so transferred.

Section 36 (2)  Subject to section 37, the maximum term of a specified portfolio asset which vests in the Bank under section 6B is a term equal to the remainder of the term of that specified portfolio asset as at the relevant vesting date.

Section 36 (3)  Where the term of a specified portfolio asset which vests in the Bank under section 6B, or of a subsidised advance increases as a result of a grant of instalment relief to the purchaser or borrower, the maximum term of that specified portfolio asset or advance shall be taken to have increased by a period equal to the period by which the term of that asset or advance was so increased.

Section 36 (4)  In this section:

• previous advance, in relation to a further advance in respect of a person, means an advance (whether a Corporation advance, initial advance, additional advance or further advance) in respect of which the person is or was a borrower, or a contract of sale, in respect of which the person is or was a purchaser, preceding the further advance in question.

Section 47  The Secretary may provide a dwelling-house for the use of a person who is receiving, or is eligible to receive, a pension under Part II of the Veterans' Entitlements Act 1986 and to whom section 24 of that Act applies.

SCHEDULE 1

AMENDMENTS TO THE DEFENCE SERVICE HOMES ACT 1918

Application

Despite the amendments made by this Schedule, section 36 of the Defence Service Homes Act 1918, as in force immediately before the commencement of this item, continues to apply in respect of certificates of entitlement in relation to a further advance that a person may seek from the Bank, if:

(a) subsidy was not payable on 9 May 1995 in relation to the advance (whether a Corporation advance, initial advance, additional advance or further advance) in respect of which the person is or was a borrower, or the contract of sale, in respect of which the person is or was a purchaser, directly preceding the further advance in question; and

(b) the prescribed period, as defined in subsection 36(4) of the Defence Service Homes Act 1918, as in force immediately before the commencement of this item, equals or exceeds 25 years as at 9 May 1995.

The Government has contracted with Westpac Banking Corporation to provide advances to persons entitled to a Defence Service Homes loan subsidy.  When an applicant's entitlement to an advance is established, a certificate of entitlement is issued by the delegate. It is then up to Westpac to determine whether the applicant meets the Bank's lending criteria before it proceeds to fund the advance.  Westpac is required to take security over advances by way of a mortgage over the relevant holding of the person. Where an advance relates to a retirement village, security, if any, shall be at the discretion of the Bank.

Further Advance (Portability) was introduced for advances, except for widow/widower and essential repairs advances, funded after 9 December 1987.  Portability was subsequently extended to advances, except for widow/widower and essential repairs advances, current at 9 December 1987.  Prior to 9 May 1995, the maximum term available under portability was 25 years.  Where subsidy was not payable on 9 May 1995, an entitlement to a further advance is dependent on the used term of the previous advance or advances not exceeding 25 years as at that date.  (See "further subsidised advance").  A Further Advance (Portability) is restricted to an amount equal to the limit on the previous advance at the date the loan account closed for the balance of the  term and at the interest rate applying to that advance.  A Further Advance (Portability) is not available to persons who had been assisted previously and discharged their loan before 9 December 1987.  A further period of qualifying service does not entitle any applicant to further assistance.

Since November 1998, clients with a current loan and who wish to transfer the loan to another home have been able to approach Westpac direct without the need to obtain a Certificate of Entitlement for a Further Advance.  Widow/Widower Advances, Essential Repairs Advances, Home Support Loans and Assigned Advances are excluded from this arrangement.

It is a general requirement that the bank take a first mortgage security over the DSH property.  However, the Bank will forego first mortgage security in certain circumstances and reserves the right to consider cases on an individual basis.  The Bank will also apply its usual creditworthiness criteria.

The following circumstances will generally prevent an eligible person from utilising his/her entitlement to a subsidised advance, or exercising portability.

The following protocols are to be observed when entering clients' surnames in the Surname field:-

(a) where applicable hyphens without spaces are to be used;

(b) where applicable apostrophes between letters are not permitted;

(c) spaces between letters are not permitted;

(d) commas or full stops are not permitted.

Examples of clients' surnames based on these protocols are:-

DATASTANDARD

Watkins-Smith — WATKINS-SMITH

L' Strange — LSTRANGE

O'Sullivan — OSULLIVAN

Le Strange — LESTRANGE

de Boar — DEBOAR

St John — STJOHN

D'Arcy — DARCY

Van den Berg — VANDENBERG

McCaulay — MCCAULAY

MacKay — MACKAY

NOTE

It is important to note that in the case of spaced surnames such as Van den Berg they are to be recorded in the DSH database as 'VANDENBERG' for the surname and 'VAN DEN BERG' for the correspondence surname (Addressee Line 1) as follows:

CLIENT DETAILS

Client Number   0000894    0

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given JOHN PAUL............................16-JUN-1953                        ...

Addressee Line 1 MR J P VAN DEN BERGTelephone Nos

           Line 2.....................................................

           Line 3................Street Name   Type  .................

Street No ...    .....................................     ........

       Town ............................State ...... Postcode ......

Country .....................Foreign Postcode.....

The protocol for entering correspondence surnames is at Data Entry Protocol GO 2.2.

The following protocols are to be observed when entering clients' surnames in the Correspondence Surname Addressee Line 1 field:-

(a) where applicable hyphens without spaces are permitted;

(b) where applicable apostrophes between letters are permitted for correspondence address only (eg L'STRANGE);

(c) where applicable appropriate spaces between letters are permitted for correspondence addresses only (For example, DE BOAR, VAN DEN BERG );

(d) Deceased estates are to be recorded at Addressee Line 1 eg. 'ESTATE OF J P VAN DEN BERG';

(e) commas or full stops are not permitted.

NOTE

Please note the difference in the protocols for Surnames and Correspondence Surnames recorded at Addressee line 1);

Examples of clients' correspondence surnames in Addressee Line 1 based on these protocols are:-

DATASTANDARD

Watkins-Smith — WATKINS-SMITH

L' Strange — L' STRANGE

O'Sullivan — O'SULLIVAN

Le Strange — LE STRANGE

de Boar — DE BOAR

St John — ST JOHN

D'Arcy — D'ARCY

Van den Berg — VAN DEN BERG

McCaulay — MCCAULAY

MacKay — MACKAY

Correspondence surname (eg Van den Berg) should be shown as it appears in the application or other record to reflect the client's preference.  This name is recorded against 'Addressee Line 1' as VAN DEN BERG as shown below:

     CLIENT DETAILS

Client Number   0000894

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given JOHN PAUL............................  16-JUN-1953                     ...

Addressee Line 1 MR J P VAN DEN BERG — Telephone Nos

           Line 2.....................................................

              Line 3................Street Name   Type  .................

Street No ......    .....................................  ........

       Town ............................State ...... Postcode ......

Country .....................Foreign Postcode.....

Where combined names and initials (eg MR J P VAN DEN BERG & MS K M MART) exceed 30 characters, the combined names are to be split over Addressee Line 1 and 2

In these cases the second name will begin at Addressee Line 2 preceded by '&'.  (see Example 9 page 37).

The following protocols are to be observed when entering clients' Given Names:

(a) given names are to be recorded in full;

(b) where applicable hyphens without spaces are permitted;

(c) where applicable apostrophes between letters are not permitted;

(d) spaces between letters are not permitted;

(e) commas or full stops are not permitted;

Examples of clients' Given Names based on these protocols are:-

DATASTANDARD

Janet — JANET

Janet Margaret — JANET MARGARET

Anne-Marie — ANNE-MARIE

Pamela St Clare — PAMELA STCLARE

John Paul`JOHN PAUL

Full Given Names (eg John Paul) are recorded against 'Given' as follows:

     CLIENT DETAILS

Client Number   0000894

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given JOHN PAUL............................16-JUN-1953                        ...

Addressee Line 1 MR J P VAN DEN BERG — Telephone Nos

            Line 2.....................................................

               Line 3................Street Name   Type  .................

Street No ......    .......................................  ........

       Town ............................State ...... Postcode ......

Country .....................Foreign Postcode.....

NOTE

Please note the difference between Given names and Addressee line 1 where only initials are shown.

The following protocols are to be observed when entering clients' Given Names for correspondence purposes in Addressee Line 1:

(a) correspondence record to show initials only;

(b) full stops are not permitted after initials;

(c) spaces to be used between initials;

(d) where applicable hyphens between initials are to be used (eg A-M for Anne-Marie);

(e) apostrophes are not permitted;

NOTE

(a) Please note the difference between Given Names and Correspondence Names at Addressee line 1;

(b)** the exception to showing initials only arises where SIR or LADY appears.  For example, in this case Addressee Line 1 would show SIR JOHN VAN DEN BERG not SIR J P VAN DEN BERG.  If LADY (given name) VAN DEN BERG's name is required, the full title would be, (eg) 'SIR JOHN & LADY ENID VAN DEN BERG';

(c) If the number of name characters exceeds maximum of 30 characters see Paragraph 2.2.1).

Examples of clients' Correspondence Given Names based on these protocols are:-

DATASTANDARD

Janet — J

Janet Margaret — J M

Anne-Marie — A-M

Pamela St Clare — P STC

John Paul — J P

Given names for correspondence purposes are to be recorded at Addressee line 1 as honorific (eg MR, MRS, CAPT etc) followed by initials only **  as follows:

     CLIENT DETAILS

Client Number   0000894

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given..JOHN PAUL...........................16-JUN-1953                    .

Addressee Line 1 MR J P VAN DEN BERG — Telephone Nos

           Line 2.....................................................

              Line 3................Street Name   Type  .................

Street No ......    ......................................   ........

       Town ............................State ...... Postcode ......

Country .....................Foreign Postcode.....

Section 20 (1)  The Secretary shall not issue a certificate of entitlement in relation to subsidy on a widow or widower advance that a person may seek from the Bank unless satisfied that:

(a) the person is:

(i)the widow, widower, or widowed parent of an eligible person; or

(ii)a spouse or de facto partner of an eligible person who is temporarily or permanently insane; and

(b) the person is a purchaser or borrower in relation to:

(i)land; or

(ii)land and a dwelling-house; or

(iii)a right of residence in a retirement village

(c) the widow or widower advance relates to that land, land and dwelling-house or right of residence.

(1A) For the purposes of paragraph (1)(b), the person is taken to be a borrower in relation to a right of residence in a retirement village if the person is, or will be, an assignor in relation to the advance.

Section 20 (2)  The Secretary shall not issue a certificate of entitlement in relation to a subsidy on a widow or widower advance that a person may seek from the Bank unless satisfied that:

(a) the advance is for the purpose of keeping the buildings, fences, fixtures and other improvements on the relevant land or of the person's retirement village accommodation in good order and repair and it would cause financial hardship to the person if he or she were to bear the cost of keeping them in good order and repair; or

(b)the advance is for the purpose of paying rates, taxes, charges or other outgoings in relation to the relevant land, land and dwelling-house or right of residence in a retirement village and it would cause financial hardship to the person if he or she were to pay those rates, taxes, charges or other outgoings.

Section 20 (3)  In deciding whether a person is suffering financial hardship for the purposes of paragraph (2)(a) or (b), the Secretary is to have regard to any guidelines approved by the Minister under subsection (4).

Section 20 (4)  The Minister may approve guidelines setting out matters to be taken into account in deciding whether a person is suffering financial hardship for the purposes of this Act.

Section 20 (5)  Guidelines approved by the Minister in accordance with this section are disallowable instruments for the purpose of section 46A of the Acts Interpretation Act 1901.

Section 21 (1)  The Secretary shall not issue a certificate of entitlement in relation to subsidy on an advance for essential repairs that a person may seek from the Bank unless satisfied that:

(a) the person is an eligible person who is a purchaser or a borrower in relation to:

(i)land; or

(ii)land and a dwelling-house; or

(iii)a right of residence in a retirement village;

(b) the advance relates to that land, land and dwelling-house or right of residence;

(c) the advance is for the purpose of enabling the person to effect repairs essential to keep the buildings, fences, fixtures and other improvements on that land or of that person's retirement village accommodation in good order and repair; and

(d) it would cause serious financial hardship to the person if he or she were to bear the cost of keeping them in good order and repair.

(1A) For the purposes of paragraph (1)(a), the person is taken to be a borrower in relation to a right of residence in a retirement village if the person is, or will be, an assignor in relation to the advance.

Section 21 (2)  In deciding whether a person is suffering serious financial hardship for the purposes of paragraph (1)(d), the Secretary is to have regard to any guidelines approved by the Minister under subsection (3).

Section 21 (3)  The Minister may approve guidelines setting out matters to be taken into account in deciding whether a person is suffering serious financial hardship for the purposes of this Act.

Section 21 (4)  Guidelines approved by the Minister in accordance with this section are disallowable instruments for the purposes of section 46A of the Acts Interpretation  Act 1901.

Section 23 (1)  Where, on application by a person for a certificate of entitlement in relation to instalment relief that the person may seek from the Bank, the Secretary is satisfied that:

(a)the applicant is a purchaser or borrower who is:

(i)the widow or widower of an eligible person; or

(ii)a widowed parent  of an eligible person; or

(iii)a spouse or de facto partner of an eligible person who is temporarily or permanently insane; or

(b)the applicant is not a person referred to in paragraph (a) but is a purchaser or a borrower who is an eligible person and the amounts of the instalments payable under the relevant contract of sale, mortgage or other security include an amount of interest calculated at a rate of more than 3.75% per year;

and that it would cause financial hardship to the applicant if the applicant were to pay in full the amounts of the instalments, the Secretary shall determine the amount by which the amounts of the instalments should be reduced and the period during which that reduction should apply.

Section 23 (2)  Where the Secretary makes a determination, the Secretary shall issue to the applicant a certificate of entitlement specifying:

(a)the amount by which the amounts of the instalments should be reduced and the period during which that reduction should apply; and

(b)particulars of such other matters (if any) as are required by the agreement.

Section 23 (3)  The Secretary shall cause a copy of each certificate of entitlement under this section to be given to the Bank.

Section 23 (4)  On the issue of a certificate of entitlement under this section, the amounts of instalments payable under the contract of sale, mortgage or other security to which the certificate relates are, if the Bank grants instalment relief to the applicant, reduced by the amount specified in the certificate during the period specified in the certificate.

Section 23 (5)  In deciding whether a person is suffering financial hardship for the purposes of subsection (1), the Secretary is to have regard to any guidelines approved by the Minister under subsection (6).

Section 23 (6)  The Minister may approve guidelines setting out matters to be taken into account in deciding whether a person is suffering financial hardship for the purposes of this Act.

Section 23 (7)  Guidelines approved by the Minister in accordance with this section are disallowable instruments for the purposes of section 46A of the Acts Interpretation  Act 1901.

Maximum amounts for which subsidy is payable

Section 25 (1)  Subject to this section, the amount that shall be specified under paragraph 17(3)(a) in a certificate of entitlement issued to a person in relation to a subsidised advance that the person may seek from the Bank is:

...

(c) in the case of a widow or widower advance or an advance for essential repairs - such an amount as the Secretary determines is necessary to give effect to the purpose for which the advance is made; and

...

Section 32  The rate of interest that shall be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to a widow or widower advance that a person may seek from the Bank is 3.75% per year.

Rate of interest on advances for essential repairs

Section 35  The rate of interest that shall be specified under paragraph 17(3)(d) in a certificate of entitlement in relation to an advance for essential repairs that a person may seek from the Bank is 6.85% per year.

Section 36 (1)  Subject to section 37, the maximum term to be specified under paragraph 17(3)(b) in a certificate of entitlement in relation to a subsidised advance that a person may seek from the Bank is:

...

(b) in the case of an additional advance, a widow or widower advance or an advance for essential repairs:

(i)a term equal to the unexpired part of the term of the borrower's initial advance, further advance or Corporation advance, or of the purchaser's contract of sale, as the case may be; or

(ii)If the Secretary determines that a longer maximum term would be appropriate, having regard to the circumstances of the case - such longer term as the Secretary determines;

...

Section 36 (3)  Where the term of a specified portfolio asset which vests in the Bank under section 6B, or of a subsidised advance increases as a result of a grant of instalment relief to the purchaser or borrower, the maximum term of that specified portfolio asset or advance shall be taken to have been increased by a period equal to the period by which the term of that asset or advance was so increased.

Agreement between the Commonwealth of Australia and Westpac Banking Corporation

7.1Applications

7.1.1 — In the event of an applicant approaching the Bank for

...

(b)Instalment Relief; and/or

...

the Bank shall provide the applicant with an application for a Certificate of Entitlement which application shall be completed by the applicant.

7.1.2 — The Bank agrees that nothing in this Agreement prohibits an applicant for a Certificate of Entitlement from applying initially directly to the Commonwealth for the purpose of obtaining such Certificate except that in the case of an application for a Certificate of Entitlement for Instalment Relief, such application can only be made through the Bank.

7.1.3 — The Bank or the applicant shall forthwith on completion of an application for a Certificate of Entitlement forward that application to the Commonwealth.

7.1.4 — On receipt by the Commonwealth of a completed application for a Certificate of Entitlement either from the Bank or an applicant, the Commonwealth shall proceed to determine whether the applicant is an Entitled applicant and, if so, shall issue to the applicant a Certificate of Entitlement.

7.1.5 — On receipt by the Commonwealth of a completed application for a Certificate of Entitlement for Instalment Relief from the Bank, the Commonwealth shall proceed to determine whether the applicant is an Entitled applicant and, if so, shall issue a Certificate of Entitlement within seven (7) days of receipt of the said application by the Commonwealth.

7.7Failure to meeting Lending Criteria

The Bank further agrees that the failure by an Entitled Applicant to meet the lending criteria set out in Schedule "C" will be the sole basis for a refusal in whole or in part by the Bank to make the Subsidised Advance or grant the Instalment Relief or give effect to the Commonwealth's consent to the Transfer of Land and Subsidy sought by the Entitled Applicant.

8.4Instalment Relief

The parties agree that where the Bank provides Instalment Relief, such relief will be granted by:

(a)a reduction in the monthly instalments of the Borrower under the Specified Portfolio Asset or Subsidised Advance and an extension in the repayment term of that Specified Portfolio Asset or Subsidised Advance to cover the cost of such reduction, thereby extending the period over which the Commonwealth pays Subsidy to the Bank; and

(b)The incorporation in the Limit of the Subsidised Advance Loan Account applicable to the Specified Portfolio Asset or Subsidised Advance of;

(i)part or all of the amount of Arrears outstanding in that Subsidised Advance Loan Account at the date of effect of the Instalment Relief; and

(ii)unpaid interest where agreed instalments are reduced as a result of the grant of Instalment Relief.

8.7Failure to meet lending criteria

In the event that a Certificate of Entitlement indicates that:

...

(iii) Instalment Relief is to be granted,

and the Entitled Applicant fails to meet the lending criteria set out in Schedule "C", the Bank agrees:

(a)that the Bank shall provide to the Commonwealth its reasons in writing as to why the Entitled Applicant has failed to meet the lending criteria set out in Schedule "C"; and

(b)at the election of the Commonwealth, the Bank and the Commonwealth shall meet to discuss what arrangements, if any, suitable to the Bank and the Commonwealth can be made whereby the Bank will provide the advance or instalment relief to the Entitled Applicant.

Approved By The Minister For Veterans' Affairs

For The Purposes Of The Defence Service Homes Act 1918

The Secretary is to have regard to the following guidelines when deciding whether a person is suffering Financial Hardship or Serious Financial Hardship for the purposes of the Act.

Financial hardship is considered to exist when the applicant's circumstances come within the General Conditions For Assessing Hardship and the ratio of the commitments on the home to the combined gross income of the applicant and spouse exceeds:

• 20% - where the combined gross income does not exceed an amount equal to the Maximum Rate Service Pension plus the Basic Income Limit;
• 25% - where the combined gross income exceeds an amount equal to the Maximum Rate Service Pension plus the Basic Income Limit.

Serious financial hardship is considered to exist when the applicant's circumstances come within the General Conditions For Assessing Hardship and the ratio of the commitments on the home to the combined gross income of the applicant and spouse exceeds 35%.

It would be expected generally that:

• the combined gross income of the applicant and spouse is less than the Average Weekly Earnings for an adult in full time employment in the State in which the home is located;
• where an applicant and spouse hold assets above the equivalent of the annual amount of the Department of Social Security pension for a single person (rounded to the next $100) plus 20% of that amount for each dependant, and provided that the assets could reasonably be expected to be sold or realised, they will utilise that excess towards:

• reducing the ratio of commitments on the home; or
• repaying the mortgage or assisting with the essential repairs;

• there are no other avenues through which the commitments on the home to income ratio could be reduced, such as negotiating with the lender for a reduction in the instalment by extending the repayment term or by other means; and

• the applicant has been unsuccessful in obtaining alternative financing;

• in the case of instalment relief, the amount which an applicant and spouse is expected to contribute towards the commitments on the home is 20% of their combined gross income.

Income: generally includes income derived from:

• salary, wages
• employment, business and professional activities
• investment and property rentals
• pensions

but does not generally include:

• allowances for dependent children
• contributions from a philanthropic organisation
• board paid by an immediate family member living in the home

Commitments on the home generally include:

• current mortgage instalments
• home owners insurance
• property rates or taxes
• body corporate or retirement village management and other fees
• the instalments of a loan raised to pay for essential repairs
• other commitments that the Secretary considers to be extraordinarily high and warranting inclusion.

Assets do not generally include:

• the home
• household chattels
• a motor vehicle

but generally include non-household goods which are easily converted to cash, such as collections of stamps, antiques, paintings, etc.

Basic Income Limit the maximum income that a person in receipt of the Maximum Rate Service Pension may earn without affecting the amount of pension payable.

MINISTERIAL APPROVAL

I, BENJAMIN CHARLES HUMPHREYS, Minister of State for Veterans' Affairs, hereby approve the above financial hardship and serious financial hardship guidelines in accordance with the provisions of sections 18(5C), 20(4), 21(3) and 23(6) of the Defence Service Homes Act 1918.

Dated, 21st January 1991

MINISTER OF STATE FOR VETERANS' AFFAIRS

RATES FOR ASSESSING HARDSHIP

The current monetary amounts needed to apply the rates referred to in the Minister's approved guidelines for determining whether a person is suffering financial hardship is maintained in a Subsidy Data Sheet on the DVA Intranet.

In accordance with the "Agreement" an application for instalment relief can only be made through the Bank (although if an application is submitted direct to DSH it can be processed).  On receipt of an application from the Bank for instalment relief a delegate is required to determine if the applicant is an entitled applicant. Upon a determination that an applicant is entitled to instalment relief, a certificate of entitlement is to be issued within seven days of receipt of the application.

When considering an application for relief, delegates need to have regard to the approved guidelines in deciding whether an applicant is suffering financial hardship or serious financial hardship for the purposes of certain paragraphs of the Act. (See Hardship Guidelines and the Rates for Assessing Hardship in Chapter 6 Entitlement GO's.)

To ensure the genuineness of the need and to avoid providing, in effect, welfare-like assistance to those with reasonable incomes, the joint income of the applicant and spouse or de facto partner would be expected to be less than the average weekly earnings for an adult in full time employment in the State in which the home is located.

Further, for serious financial hardship cases, a 35% test of housing commitments against income is to be applied. This figure is consistent with the maximum commitments allowed by lenders when considering new loan proposals and the single figure will ensure equity in treatment of applicants.

In financial hardship cases, a 25% test of housing commitments against income is to be applied. This figure is consistent with income tests in the field of welfare housing for those on pensions or low incomes.

Counselling on DSH entitlements should be given to the widow/widower on the death of an eligible person.  (This should include determining if the widow/widower has any entitlement based on her/his own period of qualifying service.)  If instalment relief is being sought, she/he is to be advised that any reduction in instalments does not relieve her/him or the estate from liability to repay the full amount of the loan plus interest.  A widow/widower seeking assistance for the payment of rates or other charges to an authority should also be advised that it may be to her/his advantage to refer first to the authority concerned as a discount, deferment or other assistance to alleviate hardship may be available.

An application for a widow/widower advance should be lodged before arrangements to commence the repairs are made and/or before the rates, taxes, charges or other outgoings in respect of the subject property are paid.

A widow/widower will be expected to make her/his own arrangements to have the repairs effected.

The legislation provides that a property, subject to a Corporation advance or subsidised advance, cannot be transferred unless a delegate has issued a certificate of entitlement to the proposed transferee.  This does not apply to a transmission of the property to an executor or administrator of the estate following the death of the borrower or in the case of survivorship in joint tenancy holdings.  The restrictive provision of section 22(1) in relation to transfers does not apply to assigned advances.

A transfer includes all agreements or arrangements providing or purporting to provide for the transfer, grant or disposal of an estate or interest, either legal or equitable, in a property, and includes an option to acquire such an interest.

A delegate can only issue a certificate of entitlement where he/she has carefully examined all the circumstances of the case and is satisfied, in accordance with the guidelines, that it is reasonable to do so.

Where the Corporation advance or subsidised advance is to be discharged at the same time the transfer is to be effected, no DSH approval to the transfer is required.

If the transferee is an eligible person, he or she may apply for assistance in the normal way.

Requests for a certificate of entitlement to transfer a property, subject to a subsidised advance, to an ineligible person will be refused.  In this case the Corporation advance or subsidised advance must be discharged or renegotiated with the Bank at the time of transfer.  Subsidy will cease at the time of transfer.

Section 22 of the Defence Service Homes Act 1918 provides for a Certificate of Entitlement to be issued in relation to a transfer.  Sub-section 22(3) provides that a certificate under this section may be issued only to a proposed transferee who is an eligible person.  Where both parties are eligible requests for a certificate of entitlement to transfer a property, subject to a subsidised advance will be refused unless the request relates to the transferee's loan entitlement.

This is to protect each eligible person's loan entitlement for individual use. Requests of this nature may arise as part of a marriage property settlement.   Sub-section 22(5) provides for certain conditions to be contained in the certificate to be issued.  In particular ss22(5)(b) and (c) provide for the Secretary to specify the maximum amount and term in respect of which subsidy will be paid.  Where the current DSH loan stemmed from the service of the property transferor, the transfer request will be refused, but the transferee is to be informed of the option of applying for either an Initial or Further Advance based on his/her own service, to re finance the property. Such an application would need to satisfy the other usual conditions.

Where the current loan stemmed from the service of the property transferee, the certificate may be issued on the basis that it is that person's loan entitlement that is being transferred.  Where the transferor and transferee have pooled their entitlements the certificate issued to the transferee will be limited to that person's individual loan entitlement.  The transferor may take up his/her portability benefit on another property at any time after the transfer takes effect, provided the original mortgage is discharged contemporaneously with the registration of the new mortgage in single tenancy.  Alternatively he/she must be released from the personal covenants of the mortgage if it remains 'on foot'.  Generally, Westpac require the execution of a new mortgage by the transferee and open a new loan account in the transferee's name.  There has been the odd case where the the transfer is effected (based on transferee's entitlement) subject to the existing mortgage and loan because the transferor is responsible for the repayments under the terms of the Property Settlement.  In this situation, the transferor is prevented from obtaining a Further Advance based on his /her entitlement because he/she is still a borrower as defined in the Act.

A request by an eligible person for a certificate of entitlement to transfer to joint tenancy with a spouse may be approved subject to production of satisfactory evidence of a de jure or de facto marriage.

If a Corporation advance or subsidised advance was taken over by an ineligible person (generally due to Family Law transfer consented to prior to 8/1/91), any request from that ineligible person for a certificate of entitlement to transfer to joint tenancy with:

• another ineligible person, will be refused.
• an eligible person, may be granted. However, such a transfer will remove the eligible person's right to apply for initial assistance under his or her own eligibility, as he or she will become a borrower under the legislation on the completion of the transfer and the Bank complying with the terms of the certificate.  Alternatively, the eligible person may apply for initial assistance in the normal way.

An order by a Court vesting the estate or interest in a property in a person or persons, is not legally a transfer until recorded on the Certificate of Title. However, if the vesting order is made subject to the consent of DSH, a certificate of entitlement for the transfer may be issued. Such consent may be given only where the circumstances would allow a certificate of entitlement to be issued in accordance with the legislation ie. the transferee is an eligible person.

Requests for a certificate of entitlement to transfer a property, subject to a subsidised advance, to an ineligible person will be refused.  In this case the Corporation advance or subsidised advance must be discharged at the time of transfer and subsidy must cease.  Options which may be available to an ineligible spouse are:

• leaving the property in the joint names of the eligible person and spouse (eligible person could not obtain Further Advance in this situation);
• approaching Westpac for a transfer of the loan on an unsubsidised basis;
• re financing through another financial institution; or
• selling the property.

If a person transfers a property or an interest in a property which is subject to a Corporation advance or subsidised advance, without the consent of DSH, a delegate can issue a certificate of entitlement in relation to the transfer only if the transfer is such that it would have attracted a certificate of entitlement if it had been submitted for a certificate prior to the transfer ie. the transferee is an eligible person or the transfer was one from the single tenancy of an eligible person into joint tenancy with his or her spouse. This is also provided no subsequent event would warrant consent being withheld.

Where the transfer is one which would not have attracted a certificate of entitlement, the subsidy may be cancelled in accordance with Section 26 of the Act.  Subsidy paid since the day of the transfer may also be recovered in accordance with Section 29.  Full details on the cancellation and recovery of subsidy are contained in Chapters 6 and 7 of Part 4 Subsidy Administration General Orders.

Section 17A of the Defence Service Homes Act 1918 sets out the criteria for issuing a certificate of entitlement in joint names or as tenants in common.  Accordingly, a subsequent transfer to a tenancy in common may be approved subject to the requirements of section 22 being met.  The removal of the power to transfer to an ineligible person means that a transfer to a tenancy in common situation can now be effected only if the applicant transferee is an eligible person.  In reaching the conclusion in accordance with subsection 22(2) that in all the circumstances it is reasonable to issue a certificate in relation to the transfer, the tenancy equity rule specified in subsection 17A(2) is to be satisfied.  An application from an ineligible spouse to transfer to tenancy in common should be refused in accordance with subsection 22(3) of the Act.  An application from the eligible person where that person's proposed equity is to be less than the amount of the subsidised loan should be refused in accordance with subsection 22(2)(a) because, in all the circumstances, it is not reasonable to approve the issue of a certificate.  The circumstance which is unreasonable is the non-compliance with subsection 17A(2) of the Act.

(a) Where the transferee is an eligible person, including widow/widower and dependent parents, he or she must apply for a certificate of entitlement in accordance with the legislation.

(b) Where the transferee is an ineligible person the subsidy will be cancelled.

Upon the death of a joint tenant and the survivor becoming the sole owner of the property, the interest which the deceased had in the property does not form part of the estate. Therefore there is no transfer as such in these circumstances, as the interest of the deceased transmits automatically to the survivor.  This action is completed on registration of a Notice of Death (NSW, ACT), Record of Death (Qld), Survivorship (Vic, SA, WA, Tas) on the Title.  All obligations fall on the surviving joint tenant.  Accordingly, the personal representative of the deceased estate has no connection with the property.  Upon the death of the surviving joint tenant, or surviving member of a 'veteran/spouse couple' if title previously not in joint tenancy, subsidy is to be cancelled in accordance with Subsidy Administration GO 6.2.2.1.

Consent will normally not be given to applications by a judgement creditor to levy execution against the property or to proceed with any action or proposal which would result in the borrower losing his/her right, title or interest in his or her property or being dispossessed therefrom while he or she is complying with the requirements of the Act and any mortgage.  Where it is considered  that there are exceptional circumstances similar to those provided for in  Administrative Framework and Decision Making GO 10.3.2 which justify the exercising of the powers of s45A of the Act, details of the case may be referred to Administration Manager (DHOAS) CO for consideration in accordance with that GO.

In the case of an advance transferred to a transferee, the term will equal the unexpired part of the advance so transferred.

The interest rate applicable to the subsidised advance prior to the transfer will continue after the transfer has been effected.

In view of the complex nature of the legislation covering benefits available to widows/widowers, a ready reference table is contained in Appendix A to assist staff in advising of the options available.  It is essential that delegates explain all the options in each category when advising the widow/widower, although it is recognised that some options may not be all that practical, dependent upon the circumstances. It is important that once the options are explained, the final decision on what benefit to apply for is left to the widow/widower.

In the table, references to a widow of an eligible person should be read to include references to a widower of an eligible person and similarly, references to a husband should also include a wife or de facto partner.  The benefits available in the Additional Advance and Widow/Essential Repairs Advances columns are dependent upon the benefit in the Loan column being taken up.  The table format, although comprehensive may not cover all widows'/widowers' circumstances.  Any case in circumstances not covered by the table should be discussed with Team Leader/Senior Subsidy Officer , particularly where the widow has completed her own military service.

Where the applicant's circumstances indicate a Further Advance option, staff must check that the portability provisions are satisfied, eg previous loan current at, or funded after, 9/12/87, and where the previous loan was not current at 9 May 1995 that previous terms have not exceeded 25 years.  Care also needs to be exercised in relation to the effective dates of legislative changes which bestow the benefits, ie. De-facto widows are eligible as widows if the person with qualifying service died after 10/11/78.  De-facto widowers of female veterans are eligible if the person with qualifying service died after 18 December 1988.  De facto partners are eligible if the eligible person died on or after 1 July 2009.

It is important to note that Instalment Relief does not comprise an advance nor alter the status of the Initial/Further Advance, and so the granting of Instalment Relief does not affect the beneficiary's status as a borrower.  In other words, it is possible for a surviving joint tenant to receive Instalment Relief and retain eligibility for an Initial Advance.

Staff should be fully conversant with the legislation and other parts of the General Orders before using the table.  Relevant GO's related to widows'/widowers' benefits are located in Eligibility Chapter 10 and GO 12.2.1 and Entitlement GO 3.6.4, Chapters 4,5,6 and 7, and GO's 10.13 and 10.14.  It is emphasised that the complexities of some of the legislative provisions mean that they are open to some debate and variance in interpretation.  Where this is so, the table applies a policy consistent with a beneficial interpretation of the legislation and sets down uniform guidelines to follow for the majority of cases.  However, there may be cases where widows have received or acted upon previous DSH advice given under earlier views of the same legislation.  It is not intended that the guidelines in the table would disadvantage those clients who have received or acted upon previous contrary advice given before the table was issued.  Delegates are encouraged to consider the merits of cases in accordance with the provisions of the legislation and to satisfy themselves that such widows are not disadvantaged.

A table setting out the various benefit options available to widows/widowers is provided in the following pages in Appendix A

[for 11.1 to 11.3, see <a href="HW-DSH/GO/Widows'/Widowers' Benefits/Appendix A">Appendix A]

11.4 — ND "DSH/GO/Transfer of Estate or Interest in a Property/11/Introduction">

It is important to note the special provisions in subsection 4(2AB) in relation to members of the World War II Women's Services listed in subsection 4(2AA).  These provisions ensure that any entitlement gained under subsection 4(2AA) will not be affected by, nor will affect, any entitlement under the Defence Service Homes Scheme gained as a spouse or de facto partner, widow or dependant parent of an eligible person.  This means that the WWII women listed in subsection 4(2AA) who have received benefits directly or indirectly as spouses of eligible persons will retain their entitlements to separate loan benefits as WWII ex-servicewomen quite independently of any other assistance.  In these circumstances the references to once only opportunities in 11.1 and 11.2 of the widows' table do not apply to those persons.

It is important to note the special provisions in subsection 4(2AC) in relation to 'veteran widowers' of the WWII Women's Services listed in subsection 4(2AA).  These provisions ensure that any entitlement gained as a widower of a WWII ex-servicewoman covered under subsection 4(2AA) will not be affected by, nor will affect, any entitlement under the Defence Service Homes Scheme gained as an eligible veteran, spouse or de facto partner, widower or dependant parent of an eligible person.  This means that the 'veteran widowers'of the WWII women listed in subsection 4(2AA) will retain an entitlement to initial assistance on one occasion and subsequent further assistance on any number of occasions as widowers irrespective of whether they have been assisted on their own service, or as a spouse, widower or dependant parent.  This includes access to concurrent assistance on both entitlements if both are unused.  In these circumstances the references to once only opportunities in 11.1 and 11.2 of the widows' table do not apply to those persons.

Please read in conjunction with COI 18 & 47

AMOUNT OF ADDITIONAL ADVANCES

EXAMPLE 1

Initial Advance$15000

Additional Advance$  5000

Limit at D/L$13000

Further Advance$13000

Amount of Additional Adv residual$5000

NB:  If the amounts of the further advance and any previous additional advance are used in the calculation under SS25(1)(b), the A/A residual in this example is $7000.  However, this would result in the applicant gaining access to loan benefits totalling $27000.  This is contrary to the intentions of the Act.

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EXAMPLE 2

Initial Advance$15000

Limit at D/L$  9000

Further Advance$  9000

Additional Advance$  5000

Amount of Additional Adv residual$5000

NB:  If the amounts of the further advance and any previous additional advance are used in the calculation under SS25(1)(b), the A/A residual in this example is $11000.  However, this would result in the applicant gaining access to loan benefits totalling $31000.  This is contrary to the intentions of the Act.

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AMOUNT OF ADDITIONAL ADVANCES

EXAMPLE 3

Initial Advance$15000

Additional Advance$  8000

Limit at D/L$19000

Further Advance$19000

Amount of Additional Adv residual$2000

NB:  If the amounts of the further advance and any previous additional advance are used in the calculation under SS25(1)(b), the A/A residual in this example is $0.  However, this would result in the applicant never gaining access to the maximum loan benefit of  $25000 on one occasion.  This is contrary to the intentions of the Act.

The following data items shown under DESCRIPTIONS and STANDARDS are to be recorded in the Street No. field if they are part of the correspondence address identifier.

DESCRIPTIONSTANDARD

ALLOTMENT — ALLOT

BLOCK — BLOCK

COUNTY — CNTY

DEPOSITED PLAN — DP

DISTRICT — DIST

HUNDRED (THE)HUND

LOCATION — LOC

PARCEL — PARCL

PARISH — PAR

PLANTAGENATE — PLANT

PORTION — PORT

SECTION — SECT

STRATA PLAN — STRTA PL

UNITS PLAN — UNITS PL

NOTE

(a) Combinations of these standards may need to be abbreviated to fit the 20 spaces,

(please see STREET NO. EXAMPLES at GO 5.1.1 on next page);

(b) GPO, PO, RMB etc will be recorded at Addressee Line 2 (please see GO 5.1.1 on next page also).

Examples of street number standards to be used are:

DESCRIPTIONSTANDARD

Number 23 — 23

Number 38a — 38A

Unit 4 at number 106 — 4/106

Unit 4 at numbers 106 to 108 — 4/106-108

Unit 4 UNIT 4

Block 1 — BLOCK 1

Block 1, Section 17 — BLOCK 1 SECT 17

Location 315 — LOC 315

NOTE

The following are NOT to be recorded in the Street Number field.  These are to be recorded at Addressee Line 2 (refer also Paragraphs 5.4 and 5.5).

DESCRIPTIONSTANDARD

GENERAL POST OFFICE — GPO

POST OFFICE BOX — PO BOX

C/- POST OFFICE — C/- POST OFFICE

ROAD MAIL BOX — RMB (or equivalent RSD, RSM, CMB etc)

Please see also examples at pages 33 - 38.

     CLIENT DETAILS

Land holdings might be described in the various States and Territories within Australia by reference to their legal description.  For example:

'That piece or parcel of land situate in parish of......County or Shire of............ being Lot No....(or Portion...) in Deposited Plan No......... being whole or part of land in the Certificate of Title Volume No......... Folio No.......'.

However, this detail is inappropriate for correspondence purposes.  Physical identification may be satisfied by simple reference to lot numbers or allotment numbers, together with the street name, especially in the case of new housing areas.  In other cases reference may be made to block and section numbers.  These numbers may be replaced later by street numbers when they are known.  The address in some small towns or villages may not include a street name.

The combinations of data in the street number and street name fields may vary.  For example:

Street Number (recorded in Street No  field) with Street Name;

Block, Section etc (recorded in Street No field) with Street Name;

Block, Section etc (recorded in Street No field) without Street Name.

The relevant details of a person's address might include the following:

Lot Number — LOT NO.315, FOWLER RD, ILLAWONG

Deposited Plan — DP 746; Volume; VOL 81; Folio FOL 6

However, the correspondence address of Lot number 315, Fowler Road, Illawong NSW 2234 should be shown in the street number field for the purposes of data entry as LOT 315 (see example below).

     CLIENT DETAILS

Client Number   0000894

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given..JOHN PAUL...........................16-JUN-1953                ...

Addressee Line 1 MR J P VAN DEN BERGTelephone Nos

                 Line 2 02-52412345

                 Line 3 Street Name   Type  02-52896644

Street NoLOT 315 FOWLER Road

       Town ILLAWONG............................State NSW  Postcode 2234

Country .....................Foreign Postcode.....

The legal identification of land in Victoria makes reference to Registered Plans and Crown Allotments as well as Volume and Folio numbers.

The correspondence address of Allotment number 315, Edwards Lane should be shown in the Addressee field for the purposes of data entry as ALLOT 315 (see example below).

    CLIENT DETAILS

Client Number    0000894

Surname VANDENBERG....................Date of Birth.................Death Indicator....

Given..JOHN PAUL.........................16-JUN-1953                   ...

Addressee Line 1 MR J P VAN DEN BERGTelephone Nos

                 Line 2 03 502412345

                 Line 3 Street Name   Type  03 502896644

Street NoALLOT 315 EDWARDS LANE

       Town MANANGATANG...........................State VIC  Postcode 3546

Country .....................Foreign Postcode.....

The correspondence address may include such references as a location number, a lot number, an allotment number, or a block number rather than a street number.  For the purposes of data entry the location/lot/allotment/block number should be shown in the (Street No.) field (maximum of 20 characters).  Lot 315 would be shown as LOT 315 as follows:

    CLIENT DETAILS

Client Number    0000894

Surname VANDENBERG....................Date of Birth................. Death Indicator....

Given..JOHN PAUL...........................16-JUN-1953                   ...

Addressee Line 1 MR J P VAN DEN BERGTelephone Nos

                 Line 2 07 -92412345

                 Line 3 Street Name   Type  07-92896644

Street NoLOT 315 EDWARDS LANE

       Town AIRLIE BEACH...........................State QLD  Postcode 4546

Country .....................Foreign Postcode.....

The correspondence address may include such references as a location number, a lot number, an allotment number, or a block number rather than a street number.  For the purposes of data entry the location/lot/allotment/block number should be shown in the (Street No.) field (maximum of 20 characters).  Location 15 would be shown as LOC 15 as follows:

    CLIENT DETAILS

Client Number   0000874

Surname.. BLINKHORN....................Date of Birth................. Death Indicator....

Given..CECIL JOHN THOMAS.........16-JUN-1953                       ...

Addressee Line 1 MR C J T BLINKHORNTelephone Nos

                 Line 2 08-92412345

                 Line 3 Street Name   Type  08-92896644

Street NoLOC  15 EDWARDS LANE

       Town ALBANY...........................State WA  Postcode 6330

Country .....................Foreign Postcode.....