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5.4.1 Overview of Home Equity Access Scheme

Last amended 
1 July 2022

What is the Home Equity Access Scheme?

The Home Equity Access Scheme is a voluntary reverse equity mortgage that offers older Australians an income stream to supplement their retirement income. This allows people who have assets in the form of Australian real estate, but who need or want additional income in retirement, to draw on the value of those assets. Payments are usually in the form of fortnightly payments but participants can request up to two advance payments within a 12-month period.

The maximum fortnightly payment underthe scheme, including any actual pension or ISS entitlement, is 150% of the maximum rate of pension. The advance payments are capped at 50% of the annual maximum pension rate. Any advance payment taken will reduce the amount available to be paid as a fortnightly loan payment over the following 12 months.

The participant's outstanding loan is subject to a compound interest rate and the loan is secured by a statutory charge over the person's real estate in Australia.  The loan would normally be repaid if the real estate is sold, or from the person's estate after their death.

Who is eligible to participate in the scheme

Persons who are eligible for service pension, partner service pension or income support supplement and have reached pension age (qualifying age for income support supplement) may elect to participate in the Home Equity Access Scheme.    

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Payment of Home Equity Access Scheme entitlements 

This section explains how the amount of the loan is calculated, how it is to be paid to the participant, the applicable interest rate and how it is to be managed including the taking of a statutory charge as a security.    

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Review of Home Equity Access Scheme entitlements

Specific changes in personal or financial circumstances may require a full review of the loan or a recalculation of the amount of loan payments.     

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Repayment of loan amount

A loan under the Home Equity Access Scheme does not usually need to be repaid until after the death of the pensioner, however the Repatriation Commission may require a loan to be repaid before death in certain circumstances.     

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A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.