FAQs

The Home Equity Access Scheme (HEAS) has been in operation in various forms since 1985 and it is one of the Australian Government’s best kept secrets. The intent of the HEAS is to assist seniors fund their regular costs of living by accessing some of the equity they have in their home or property.

Historically the HEAS hasn’t had significant take up by seniors due to its restrictive eligibility rules, and not being actively promoted by the Government. However, that all changed on 1 July 2019 as now all Australian resident seniors who own property can access the HEAS.

The HEAS is a ‘reverse mortgage’ style contract where the Australian Government provides you with a loan amount each fortnight – at a maximum payment level of 150% of the Full Age Pension less any government pension you currently receive. The loan is secured against any property you own in Australia (unfortunately you cannot use relocatable homes or property in retirement villages under the scheme). A ‘reverse mortgage’ simply means you are not required to make any repayments during the term of the loan, although you certainly can if you wish to, and have the funds to do so.

Interest is charged on the outstanding loan amount each fortnight (currently the rate is 3.95% p.a. variable). As you do not need to make any loan repayments the interest compounds over time (in other words you will be charged interest on the interest).

You will generally be required to repay the loan when you (or your surviving partner if you’re in a relationship) either:

• Permanently move out of your home; or
• Sell your property; or
• Pass away, in which case the proceeds of your estate will be used

The Australian government is the provider of the Home Equity Access Scheme and the Scheme is administered via the Department of Human Services/Centrelink and for veterans via the Department of Veterans Affairs (DVA).

The Australian Government has provided the Home Equity Access Scheme (in various forms) since 1985. The scheme was previously known as Pension Loans Scheme (PLS) until 31 December 2021.

No. The rule changes effective from 1 July 2019 expand the HEAS to be accessible to all Australian resident seniors who have sufficient equity in their property - including self-funded retirees.

If you are currently receiving the Age Pension or similar seniors welfare payment (or a DVA pension) and you own property in Australia, you will most likely meet the eligibility criteria.

To be eligible for the HEAS you (or if you are in a couple relationship at least one of you) need to meet the following criteria:

1. Meet Centrelink’s Australian residency requirements:
You need to have been an Australian resident for at least 10 years in total. For the last five (5) of these years, there must not have been any break in your residency.

• You are an Australian resident if you live in Australia and are either:
  1. An Australian citizen; or
  2. A permanent residence visa holder; or
  3. A protected Special Category visa (SCV) holder

2. Be at least of Age Pension Age which is currently 66 years old but increasing to 67 as shown below:

3. Own real estate property in Australia which includes:

• Houses *
• Apartments / Units / TownHouses *
• Farm (or hobby farm)
• Commercial premises
• Retail premises
• Vacant land / bush block
• Home office / business
• Self contained flat (part of or attached to a residence)
• Market garden
• Residential block larger than 2 hectares

* There are two notable exceptions (due to not having title to the underlying land)

• Retirement villages
• Relocatable homes

Generally retirement villages and relocatable homes do not include title over the land on which the dwelling/building resides, which is why the government does not accept these forms of property as security for Home Equity Access loans.

It is dependent on:

• The amount of any Age Pension (or similar welfare payment e.g. widows pension) you (or you and your partner) receive
• The net equity (i.e. the value of your property less any loans secured by that property) you have in your property
• Your age or the age of the youngest partner, if you’re in a couple relationship
• The amount of Home Equity Access per fortnight you wish to access
• The value of any Requested Amount (i.e. an amount of equity you always wish to keep in your property) you determine

* The Home Equity Access Scheme maximum is 150% of the Full Age Pension (which includes any Age Pension received)

Examples of maximum Home Equity Access Payments for different pension status:
We recommend you try our Pension Boost Calculator to see what the HEAS might mean for you.

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Note: Whilst these tables show the maximum Home Equity Access Scheme levels as at 20 March 2023, you can select any payment amount up to the maximum.

If you choose the maximum level, your Home Equity Access payments will automatically change when the Age Pension payment rates are adjusted for inflation (usually in March and September each year).

If you chose a set amount (say $500) then this payment level stays the same until you advise Centrelink/DVA you wish to change it.

The term over which you could potentially receive payments under the HEAS is dependent on:

• The amount of any Age Pension (or similar welfare payment e.g. widows pension) you (or you and your partner - if applicable) receive
• The net equity (i.e. the value of your property less any loans secured by that property) you have in your property
• Your age, or the age of the youngest partner, if you’re in a couple relationship
• The amount of Home Equity Access loan per fortnight you wish to access
• The value of any Requested Amount (i.e. an amount of equity you always wish to keep in your property) you determine

Generally speaking, the older you (and/or your partner) are, and the higher the net equity in your property, the longer the Home Equity Access loan payments can be made.

We recommend you try our Pension Boost Calculator to see what the Home Equity Access Scheme might mean for you.

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The HEAS interest rate is 3.95% pa (current as at 20 March 2023, but please note this rate has not been adjusted for any RBA rate changes since May 2022) and it is a variable rate charged on the HEAS loan balance at the end of each fortnight until the HEAS loan is fully repaid.

For the latest interest rates try these links:
https://www.infochoice.com.au/compare/home-loans/reverse-mortgage
https://www.servicesaustralia.gov.au/home-equity-access-scheme

Whilst you are not required to make any payments of this interest you can if you wish to and can afford to.

The government does not charge any HEAS application, establishment, valuation or similar charges to set up the loan. There are also no ongoing fees and charges with the HEAS.

There is a legal charge to prepare and lodge a caveat on the title to your property which is usually in the range of $450 to $650 depending on which State your property is located in. This charge is normally added to your HEAS loan at the beginning so you are ‘not cash out of pocket’.

The HEAS has a number of factors which can influence the options and outcomes. We recommend you try our Pension Boost Calculator to see what the Scheme might mean for you.

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Of course you can! You just need to ensure you communicate your changes to Centrelink/DVA. The HEAS includes options to:

• Take ether the maximum payment or a lower amount
• Reduce or increase the payment amount (within the maximum permitted)
• Pause your payment for a period if you don’t need the funds
• Restart your payments if you need the funds again
• Request a lump sum advance
• Select a ‘Requested Amount’ or not

Pension Boost can assist you in relation to managing your Home Equity Access loan on an ongoing basis to ensure you remain in control of your finances.

You can use the payments you receive each fortnight under the HEAS for any purpose you wish. This could be to fund regular bills, pay for in-home care services, enjoy life’s little luxuries, a short holiday, take care of those repairs you’ve been putting off - whatever you like.

No. We’ve now run literally 10,000’s of Pension Boost Calculator scenarios for seniors and the median home value is $500,000. Somewhat surprisingly, a significant proportion of seniors using our calculator have mortgages outstanding. A significant majority of seniors are on the Full Age Pension and advise us they are struggling to make ends meet.

No. Whilst the Home Equity Access Scheme is linked to the Age Pension (by the maximum payment level being tied to 150% of the Full Age Pension), accessing the HEAS does not impact your Age Pension entitlements.

No. The Home Equity Access Scheme is a loan-based payment scheme, drawing on the equity (capital) you have built in your home, so it does not impact your income tax position.

No problem - just select the level of payments you need each fortnight. You can always change the level of payments by notifying Centrelink/DVA. Pension Boost can assist you to determine the level of Home Equity Access loan that you’d be comfortable with.

No. The HEAS now comes with a No Negative Equity Guarantee which means you will not be liable for a HEAS debt that exceeds the value of your property when sold.

Pension Boost recommends you discuss your situation with your family before considering applying for the HEAS. We are also happy to talk with them, if required, as we often have children of seniors enquiring on behalf of their parents.

A feature within the HEAS is the ‘Requested Amount’, which is an amount you can ask to be reserved for you for your future needs (like aged care facilities) or your estate.

No. Rather than a full registered mortgage the government secures its Home Equity Access loan to you via a ‘registered lien’ or ‘registered charge’ over the property you put up as security for your Home Equity Access loan.

You will need to provide copies of the below when you start your HEAS application:

• Your property Title Deed or Certificate of Title; and
• A recent Land Valuation Notice or Council Rates Notice; and
• Your current insurance policy over the property; and

If you have an existing loan secured over the property, you also need to provide copies of a:

• Recent loan statement
• Loan contract

Approval of a Home Equity Access loan application is made in writing by Centrelink / DVA and this usually occurs in 10 - 14 weeks, depending on the complexity of the application.

Whilst there is no obligation to make any repayments of the HEAS until you either permanently vacate your property or you, or your estate, sell the property you can make voluntary repayments of some or all of the HEAS loan at any time without penalties or fees.

HEAS borrowers can make repayments using a credit card, debit card or BPAY through their Centrelink online account. For those who do not have a centrelink online account you need to mail a bank cheque to Centrelink with your name and Customer Reference Number (CRN) details.

The HEAS now provides a lump sum option which works like an advance payment and is available to all HEAS borrowers including existing borrowers.
The maximum lump sum you can access in a twelve month period is 50% of the full annual age pension which (as at 20 Sept 2022) is:

• Couples lump sum maximum - $20,852
• Singles lump sum maximum - $13,832

If you draw a lump sum from the HEAS this will reduce your HEAS fortnightly payments over the next 12 months.

Examples:

1. Couple on the full age pension wishes to access $13,000 as a lump sum and draw the maximum HEAS payments. Their maximum HEAS payments of $802 / fortnight will be reduced by $500 ($13,000 / 26). Over the year they will receive $20,852 in HEAS payments (being the current maximum for full age pension couples).

2. Single self funded retiree wishes to access maximum lump sum and HEAS payments. Their lump sum of $13,832 will reduce their HEAS fortnightly payments by $532. Over the year they will receive $41,496 in total HEAS payments (being the current maximum for a self funded single).

Provided you meet the residency, pension age and property ownership criteria if your property is co-owned with a third party then you are still eligible for the HEAS but only for your relevant pro-rata share of the net equity in the property.

The co-owner(s) need to consent to your applying for the HEAS and they must sign their section of the HEAS application in front of a suitably qualified witness (eg Justice of the Peace).

Provided you meet the residency, pension age and property ownership criteria then if your property is owned by a closely held private company or private trust then you are still eligible for the HEAS.

There maybe additional forms that may need to be lodged in relation to the company or trust and the company or trustee will need to provide a written guarantee in relation to the HEAS debt.

Pension Boost is a subsidiary of Household Capital, an Australian independent retirement funding provider founded in 2016 with a mission to help retired Australians Live Well at Home. It offers retirees a responsible, sustainable, and flexible financial solution that allows them to bundle their superannuation savings, equity in their home and their Aged Pension to achieve their retirement goals while continuing to live at home.

There are 1.8 million seniors on the Age Pension who own property, many of whom could use additional cashflow to better enjoy their retirement.

Pension Boost are specialists in the Australian Government’s Home Equity Access Scheme (HEAS). We act as your agent when dealing with Centrelink/DVA to take the hassle out of the process for you.

Some of the ways Pension Boost assists seniors includes:

• Raising awareness of the HEAS (one of the government’s best kept secrets)
• Educating seniors on what the HEAS is, its ‘rules’ and how it works
• Assisting seniors and their families decide whether the HEAS may be of benefit to them
• Demonstrating to seniors via our Pension Boost Calculator what the HEAS may mean for them financially
• Determining the type of Home Equity Access loan that best suits a senior’s individual circumstances
• We remove the hassle of dealing with Centrelink/DVA by acting as an ‘agent’
• Assisting seniors with their application for the HEAS
• Dealing with any questions or queries raised by Centrelink/DVA
• Providing ongoing reporting and reviews of a senior’s cash flow needs and Home Equity Access loan level, to ensure they remain in control of the net equity in their home, and have the funds to make ends meet

You can learn more in the About Us section of our website

HEAS Application Service

See our Services & Fees page

No. Centrelink/DVA will arrange for an independent valuation of your property before your loan is approved. Centrelink/DVA pay for this valuation and not the applicant(s).

During COVID-19, to protect seniors health and safety, many valuations are being done as either desktop valuations (using averages for your style home in your area) or drive-by valuations.

If you disagree with the Centrelink/DVA valuation you can request another valuation.

No. Based on our legal advice and discussions with DSS, Centrelink and ASIC, while the HEAS is a ‘reverse mortgage like’ scheme, the HEAS is technically a  ‘welfare claim’ under the Social Security Act and therefore is not subject to the regulations applying to commercial providers of reverse mortgage loans. The exception is the 'no negative equity guarantee' protection, which was applied to HEAS from 1 July 2022 (and which has applied to commercial providers since 2012).