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Myth Busted: I'm not on the Age Pension so I'm not eligible for the PLS

30th July, 2020

Up until June 2019, the Government’s Pension Loans Scheme (PLS) was designed as a ‘reverse mortgage’ style solution for a restricted group of later-life Australians (being seniors on part Age Pensions, or seniors who failed one, but not both, of the Income and Assets means tests) to enable them to ‘top up’ their pensions by a allowing them to access the equity in their homes.

Under the revised PLS rules introduced on 1 July 2019, seniors do not have to be receiving or eligible for the Age Pension to be eligible for the PLS. Self-funded retirees are now eligible, provided they (or their partner if in a couple):

  • Meet the minimum age (currently 66 years) and residency requirements
  • Own the underlying land – not lease or rent it (which is how many retirement village and over 50 community living centres are structured)
  • Have sufficient ‘net equity’ (i.e. the property value less all secured debts) in the property being put up as security

Given its history, it’s easy to see why the name ‘Pension Loans Scheme’ was used. The problem is that post the PLS rule changes, the name is not as inclusive as it needs it to be, and it’s turning potential eligible seniors away.

So, what might be a more inclusive name? How about….Seniors Loans Scheme?

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Myth Busted: You Can’t Access the PLS if You Have a Mortgage