An eligible person may be joined in the advance by his/her spouse or de facto partner. Subsidised advances may be allowed in the joint names of an eligible person and spouse or de facto partner provided they hold the land for which the advance is made as joint tenants.
3.6.1.1Purchase of equity in property. Applications to purchase equity in a property are to be processed as applications to 'buy'. Should the other owner not be a spouse or de facto partner of the applicant, ownership will need to be as a tenant in common and subject to the equity rule in section 17A(2) of the Act. Where the property is already subject to a DSH subsidised advance, the existing borrower will need to apply for a transfer certificate under section 22 in addition to the purchaser's application. Where the existing borrower is ineligible (ie an ineligible transferee before 8/1/91) the subsequent transfer application is to be refused. Where the existing eligible owner is the spouse or de facto partner of the current applicant, the parties will have a choice of either joint tenancy or tenancy in common. (Please also see Ent GO 3.6.4 below).
Two eligible persons may pool their DSH entitlements on the one property provided they are spouses or de facto partners. Such advances are available to each applicant on the same terms and conditions as is appropriate to their individual status. Applications received from eligible persons who are not spouses or de facto partners can only proceed where the title is to be held as tenants in common. (Please also see Ent GO 3.6.4 below).
Two or more nurses who come within the paragraphs (b) and (d) of the definition of 'Australian Soldier' may be assisted in respect of a building to be used as a hospital, sanatorium or nursing home. The assistance may be made to one such person or to two or more such persons jointly (either as joint tenants or as tenants in common). In the case of two or more persons the subsidised advance shall not exceed the sum of the amounts which could have been made if a subsidised loan had been made to each of those persons separately.
An eligible person may be issued with a certificate of entitlement for a subsidised advance in respect of a holding which is held with another person or persons as tenants in common. In order to ensure that there is no leakage of the eligible person's loan benefit to ineligible people, the value of the eligible person's tenancy must be at least equal to the amount of the subsidised advance. An eligible person may hold as tenant in common with a spouse or de facto partner, or with any number of other persons, subject to the proviso regarding the value of the eligible person's tenancy.
Widows/widowers who are eligible on the basis of their own service as well as their spouse's or de facto partner's service are able to receive the benefits to which they would have been entitled had their spouses or de facto partners not predeceased them. ie they are allowed to "pool" the entitlements. Two Certificates of Entitlement (each for a maximum of up to $25000 where neither entitlement has been used before, or the relevant limit balances where loans have been partly used) may be issued to a widow/widower where that person is both an eligible person in her/his own right and the widow/widower of an eligible person, provided that the widow/widower has not legally remarried at the time of determining eligibility on the widow/widower status. Two separate but cross referenced Certificates of Entitlement should be issued if assistance is approved.
It is important that the widow/widower is counselled fully on her/his entitlements because the chance to obtain dual assistance is a once-only opportunity. If she/he decides to take only one advance (ie. an advance is obtained on the person's own eligibility either as an Australian soldier or as a widow/widower), she/he would be unable to obtain the other advance at a later date. This is because she/he will become a borrower otherwise than merely because she/he was a joint borrower with her/his spouse or de facto partner and therefore her/his circumstances would no longer satisfy the criteria for an initial advance as defined in Section 4 of the Act. However, it is equally important to note that this rule does not apply in cases where the widow is eligible as a WWII ex-servicewoman as provided by subsection 4(2AA), nor to a 'veteran widower' of such a person, because of the special provisions contained in subsections 4(2AB) and 4(2AC) in relation to further and initial advances.
Where a married couple has pooled their entitlements and one of them dies, the survivor may receive two further advances. Both further advances would be for the limits of the loans at the time they were discharged. Again this is a once-only opportunity.
Eligibility GO 12.2.1 outlines three categories of widows/widowers in circumstances where their spouses or de facto partners have received assistance. The three categories are:-
(i) where an advance, taken out as joint tenants, was discharged prior to the death of the person on whose service the advance was granted;
(ii)where an advance, taken out as joint tenants, was current when the person on whose service the advance was granted died. The widow/widower would then become the sole borrower through survivorship without using her/his own entitlement; and
(iii) where an advance was taken out by the now deceased person in his/her sole name.
A widow/widower in either of the first two categories has previously been a purchaser or borrower merely because she/he was a joint purchaser or borrower with her/his spouse or de facto partner and became such a purchaser or borrower on the basis that her/his spouse or de facto partner was an eligible person. Therefore, such persons are included among those able to receive initial advances as defined in ss4(1).
For category (iii) widows/widowers, a property which is subject to a DSH loan is allowed to remain in the name of the estate. Under these circumstances, a subsidy would continue to be paid without affecting the widow's/widower's entitlement. It is not necessary to transfer the property to a surviving spouse or de facto partner for a subsidy to continue. If the property and the loan are not transferred, no entitlement is lost. A widow/widower in category (iii) would become a borrower in her/his own right if she/he elected to transfer the property to her/his name as beneficiary and would therefore no longer be entitled to receive an initial advance. As mentioned above, this rule does not apply to WWII ex-servicewomen covered by subsection 4(2AA), nor to a 'veteran widower' of such a person.
If the property and the loan is transferred, only the limit of the late spouse's or de facto partner's loan is then available for portability purposes. There is no entitlement to another initial advance. Where a client seeks a further advance, the normal provisions relating to further advances are to be applied. Care should be exercised to establish whether the widow/widower has remarried since the original Certificate of Entitlement was issued- remarriage voids the status of a widow/widower. Where a widow/widower has remarried, only a subsidised loan granted in respect of that person's own service may be taken into account for determining the amount of the further advance.
Most forms of ownership of other houses are barriers to eligible persons utilising their DSH entitlement until such time as they have disposed of their interest in them. Reference to ownership as an exclusion to assistance is covered in Ent GO 3.7.5. However, there are circumstances where certain forms of ownership do not result in bars to assistance and are therefore listed in this part of the General Orders as inclusions. The details are:-
3.6.6.1 Permanently Separated Spouses or De facto Partners. Where the applicant and spouse or de facto partner are permanently separated, the ownership of a house by the permanently separated spouse or de facto partner will not prevent the issue of a Certificate of Entitlement. The term 'permanently separated' applies to the circumstances where parties to a marriage have severed the marital relationship resulting in an evident breakdown of marriage. The applicant must complete a statutory declaration attesting to the significant factors supporting the claim. The permanent separation provision is included in the Act to ensure that those persons whose marriage has broken down, but who choose not to divorce, are not disadvantaged. It is important that each case be determined according to its circumstances but, as a general principle, a separation of more than twelve months will be regarded as permanent unless there are reasons to consider otherwise.
3.6.6.2 Ownership of a Combined Business and House. Ownership of a property consisting of a combined business and residence by the applicant and/or the spouse or de facto partner of the applicant does not constitute ownership of another house for the purpose of the Act where documentary evidence shows that the use of the house portion of the property by the operator of the business (other than the applicant and/or spouse of the applicant) is a necessary incident to the operation of the business, and therefore is unable to be occupied by the applicant as a home.
3.6.6.3 Ownership of a House Subject to Exclusive Occupancy Rights or a Life Interest. Where an applicant and/or the spouse or de facto partner of the applicant either solely or together own a house, and a life interest or an exclusive occupancy right is vested in another person, the interest in that house does not constitute ownership of another house providing the vesting of the interest was created by circumstances beyond the control of the applicant or the spouse, ie. by virtue of a Will or Court Order. If an interest in a house is divested by mutual consent or voluntary agreement (other than a trust) it is considered that the house is still owned by the registered owner.
3.6.6.4 Ownership of a House which is Subject of a Trust. An applicant is not considered to be the owner of a house, even if he remains on the title document as the owner, where he has passed the beneficial ownership of the house by the creation of a valid declaration of a trust, to the beneficiaries of that trust. The delegate should ensure that only those trusts which are considered to divest the ownership and which are not revocable are recognised.
3.6.6.5 Ownership of Shares in a Company which Owns a House or Unit. A company is a legal entity separate and distinct from its shareholders and a shareholder has no legal or equitable interest in land registered in the name of the company. As it is the company in which the entire legal and equitable interest is vested, ownership of shares in a company which owns a house or unit does not make a shareholder an owner of a house even where that person holds controlling shares in the company.
3.6.6.6 Ownership of a House which has been Sold under a Contract of Sale. The execution of a binding contract of sale for a house, of which the applicant and/or the spouse or de facto partner are/is joint registered owners or sole owner, makes the purchaser the equitable owner of the property and assistance may be made available. However, a Certificate of Entitlement cannot be issued until the conditions in the contract have been complied with or where contemporaneous settlements of the sale of one home and the purchase of another with DSH assistance are to occur.[Entitlement GO 3.7.5.4 also refers]. When conditions in a contract have been complied with a certificate may be issued even though settlement may not yet have occurred.
3.6.6.7 Ownership of a House Situated Outside Australia and its Territories. The Act has no application outside Australia and ownership of a house outside Australia and its Territories should be disregarded.
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