Date amended:

Legislative Authority

Veterans' Entitlements Act 1986
Sections 52ZAAA to 52ZN


Stated Current Purpose/Intent

To provide income support in the form of a loan to a person who receives service pension or income support supplement, or who would receive such a payment but for the income test or assets test.

Current Eligibility Criteria

It is assumed that a person who owns substantial assets can use them to produce income and meet living expenses.  However, situations may arise where a person is unable or, for any reason, unwilling to re-arrange his or her assets.

A person is eligible if he or she:

  • is a veteran or war widow/er who is 60 years of age - or is the partner of a veteran and is pension age (for pension ages - see Tables);
  • is in receipt of, or eligible to receive, a service pension or income support supplement;
  • would receive a rate of service pension or income support supplement greater than nil under either the income or assets tests.

It is a requirement that all applicants have adequate insurance of the secured asset and not be bankrupt (or have a personal insolvency agreement).

1. The home equity assistance scheme allows a person to receive a payment in the form of a loan. The maximum fortnightly amount payable inclusive of the pension rate is 150% of the maximum pension rate.  Participants can access up to two lump sum advances in any 12-month period, up to a total of 50% of the maximum annual pension rate.  Any advance taken will reduce the amount of HEAS payments that can be taken as fortnightly payments for the rest of the 12 months.

2. The HEAS component of a person's payment attracts interest and is generally repayable from the person's estate or when the home is sold.  The loan may be paid for a short period while the person's assets are being re-arranged, or for an indefinite period.

The Home Equity Access Scheme has a No Negative Equity Guarantee, meaning, the person will not have to pay more than the market value of their home as repayment, even if the amount of interest accrued has resulted in the balance of the debt exceeding the value of the property.

Date of Introduction



Original Purpose/Intent

The Government introduced the Pension Loans Scheme in 1985 to enable those pensioners whose assets excluded them from receiving a service pension or whose rate of payment of service pension was reduced under the assets tests, to qualify for income support.  The amount of money paid to a pensioner each fortnight was equal to the rate of pension assessed under the income test.

Such support is considered to be a debt to the Commonwealth attracting interest against the value of the funds advanced at a rate set by the Minister for Families, Housing, Community Services and Indigenous Affairs.  Strict rules regulate the granting of these pensions by the Department and the recovery of the debt incurred.

If a veteran subsequently becomes eligible to be paid a service pension or other income support, pension paid to the veteran under the Pension Loans Scheme is deducted from his or her fortnightly payment.


Significant Changes in Criteria or Purpose Since Introduction


The Pension Loans Scheme became available to income support supplement recipients.


Accessibility to the Scheme was expanded by:

  • lifting the loan amount to the maximum pension rate;
  • expressing the interest rate in compound, rather than simple, terms; and
  • making loans available to people who meet either the income or assets test.

Accessibility to the Scheme was further expanded by:

  • lifting the loan amount to 150% of maximum pension rate;
  • making loans available to all – no need to meet the income or assets test, just need to be eligible to for service pension or income support supplement from DVA;
  • allowing for the recovery of the nominated amount if required;
  • additional requirement that the applicant must hold adequate insurance for the property offered as security;
  • applicants must not be bankrupt or subject to an insolvency agreement.
20201 January 2020 - Pension Loans Scheme interest rate reduced from 5.25% to 4.5%.
20221 July 2022 - Introduction of No Negative Equity Guarantee (NNEG) and lump sum advances.