10.12.14 Ownership of the motor vehicle provided by MVCS

If the MRCC subsidises the purchase of a motor vehicle for a person, the person is taken to be the legal owner of the motor vehicle.

However, the Commonwealth has a chattel mortgage interest in the motor vehicle to the extent of the amount of the subsidy. The conditions attached to a chattel mortgage include the following:

The motor vehicle cannot be:

• sold;
• transferred;
• encumbered (that is, held as an interest against another debt such as a mortgage); or
• otherwise dealt with;

without the Department agreeing in writing or agreeing in writing to discharge the chattel mortgage.

Any sale, transfer, encumbrance or other dealing, without the agreement of the Commonwealth, is void and of no effect as against the Commonwealth.

The person must maintain the motor vehicle in good working order. If the motor vehicle is damaged and the person receives any payment in respect of the damage from an insurer – the person must apply the amount of the payment towards repairing the damage to the motor vehicle or the replacement of the motor vehicle, as discussed above.

If a person who has received a subsidy for the purchase of a motor vehicle under the MVCS dies, the Commonwealth’s chattel mortgage is to be taken to be discharged the day after the person’s death.

If a person who has received a subsidy for the purchase of a motor vehicle under the MVCS claims a replacement motor vehicle, the MRCC may discharge the chattel mortgage on the current motor vehicle to facilitate its sale.