5.4.6 Repayment of Home Equity Access Scheme
- Log in [1] to post comments
This section outlines the policy regarding the repayment of loans under the Home Equity Access Scheme.
Repayment of Loan After the Death of Participant
- Log in [2] to post comments
Loan repayment following death
VEA ? [3]
When a Home Equity Access Scheme (HEAS) participant dies, the loan under the scheme is usually recovered from their estate.
If a pensioner with a Home Equity Aceess Scheme loan dies and... | Then... |
there is no surviving partner, | DVA [4] usually enforces the charge on the property used as security and recovers the loan immediately as a lump sum. |
there is a surviving partner entitled to loan payments but who does not wish to continue receiving them, | that person may choose to repay the loan at any time by making repayments or by withholding an amount from any pension entitlement. |
there is a surviving partner entitled to loan payments and wishes to continue receiving them, | Payments will continue and recovery of the loan is deferred until the death of the surviving partner. |
there is a surviving partner who is not entitled to receive Home Equity Access Scheme payments (for example they are below the pension age) | the loan may be recovered after the bereavement period [4]. More ? [5]
Note: In this case, discretion exists to phase, delay or accept partial recovery where the family home is involved. |
Restrictions on recovery
VEA ? [6]
The restrictions on the recovery of a loan are shown in the table below.
If a member of the couple dies and the partner... | Then... |
receives bereavement payment | the loan may be recovered after the last day on which a bereavement payment is payable. More ? [7]
|
is over veteran pension age and has use of all or part of the assets subject to the charge | the loan may be recovered after the death of the partner. |
Manner of recovery negotiable
Where the amount of the loan is recovered from a person's estate, it is expected that the full amount of the loan should normally be repaid by the executor of the estate as a lump sum. However, the manner of recovery can be negotiated between the Commission and the executor.
The Department of Veterans' Affairs.
Bereavement period, as defined in section 53H of VEA [14], in relation to a person's death, means the period of 98 days starting on the day on which the person died.
Repayment of a Loan Prior to Death
- Log in [15] to post comments
Situations where loan repayment occurs prior to death
VEA ? [16]
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 [4] 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.
More ? [17]
Loan recovery limits
If DVA [4] 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
VEA ? [18]
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.
Section 52ZK [8] VEA - Effective date of withdrawal from scheme
Section 52ZKA [8] VEA - Repayment or recovery of debt after scheme ceases to operate
According to Section 179 [23]of the VEA [23], the Commission is a body corporate under the name of Repatriation Commission.
The Department of Veterans' Affairs.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16148%23comment-form
[2] https://clik.dva.gov.au/user/login?destination=node/16251%23comment-form
[3] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn108
[4] https://clik.dva.gov.au/%23
[5] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn109
[6] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn110
[7] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn111
[8] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[9] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn108
[10] https://clik.dva.gov.au/compensation-and-support-policy-library/part-8-bereavement-assistance
[11] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn109
[12] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn110
[13] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn111
[14] http://www.comlaw.gov.au/Series/C2004A03268
[15] https://clik.dva.gov.au/user/login?destination=node/16222%23comment-form
[16] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn112
[17] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn113
[18] https://clik.dva.gov.au/book/export/html/16148#tgt-cspol_part5_ftn114
[19] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn112
[20] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/91-income-and-assets-test-principles
[21] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn113
[22] https://clik.dva.gov.au/book/export/html/16148#ref-cspol_part5_ftn114
[23] http://clik.dva.gov.au/legislation-library