Situations where loan repayment occurs prior to death
A person can choose to repay all or part of the loan and accrued interest at any time. The Commission has the discretion to accept repayments by instalments or lump sums.
Additionally the Commission has the discretion to seek loan recovery before a person's death where:
- the participant sells or disposes of the property used as security, or
- a property settlement occurs.
Example of loan recovery prior to death
A farm property is devalued placing full recovery in jeopardy. Sale of part of the property may be sought to ensure the prospects of future full recovery are assured.
Loan recovery limits
If DVA is given prior notice of the sale or disposal of a property, the maximum amount of loan payable by a person is the value of the loan. Any nominated amount may still be recovered from the sale of the property if the outstanding loan is more than the sale price less the nominated amount.
Recovery of loan after Home Equity Access Scheme ceases to operate
Section 52ZK VEA - Effective date of withdrawal from scheme
Section 52ZKA VEA - Repayment or recovery of debt after scheme ceases to operate
Ongoing payments under the scheme cease from the pension payday after
- a request to withdraw from the scheme is made; or
- the scheme ceases to operate because accrued loan amount exceeds the maximum loan available
If a pensioner withdraws from the Home Equity Access Scheme, they can either:
- repay the loan in full;
- repay part of the loan and accrued interest at any time; or
- defer recovery from their estate until after their death.
Separation of Home Equity Access Scheme couple
If a couple separate permanently, the loan may be recovered when the property settlement occurs or at an appropriate time dependent on the circumstances of the case.