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Media Release | 17th December, 2021The government rebrand and reduces the interest rate for the Pension Loans Scheme

Pension Boost welcomes a lower Pension Loans Scheme (PLS or Scheme) interest rate to 3.95% and a re-branding to Home Equity Access Scheme from 1 January 2022.

Paul Rogan, CEO & Founder of Pension Boost, has been working with his team to advocate for a fairer rate for seniors.

“We had raised a petition supported by ~1,700 people to have the PLS rate reduced and are pleased to see the government has acted.

“Whilst the PLS rate has been improved, the reduction reflects changes that should have been made when the RBA made COVID19 emergency reductions to the benchmark interest rate during 2020. Seniors participating or considering participating in the Scheme deserve a fairer and more transparent rate-setting mechanism so that retirees can have greater confidence and trust in the Scheme and this remains outstanding,”

You can read more about the petition and the advocacy behind it here.

Mr Rogan believes establishing a more equitable rate-setting mechanism would remove the last impediment to making the Scheme a more attractive reverse-mortgage facility for senior consumers.

“Based on our discussions with clients, the fact the Scheme is provided by the government provides a level of comfort to seniors when comparing their reverse mortgage options,” said Mr Rogan.

The Scheme is offered by the government to allow seniors to boost their retirement income by unlocking the equity from their property.

July 2022 changes to the Scheme make it even more attractive to retirees

“The government’s support for the Scheme as a way for seniors who want to stay in their homes by making use of their household equity has been evidenced by the actions announced in the 2021 Federal Budget which will enhance the Scheme’s appeal to seniors,” said Mr Rogan.

Pension Boost has successfully advocated to the government to improve the Scheme in the following ways from 1 July 2022:

  • Introduction of a no negative equity guarantee, meaning seniors (or their estates) will not be left with a debt to the government if the property sale price is less than the PLS loan debt;
  • Introduction of a lump sum option, of up to 50% of the full age pension rate;
  • Launching of education and awareness programmes for seniors about the PLS; and
  • Rebranding of the Scheme to be inclusive of self-funded retiree.

Between the changes coming in from 1 July 2022 and the rate change in less than two weeks, the PLS is a much more viable option for eligible Australian seniors.

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