Home Equity Access Scheme
What is the Home Equity Access Scheme (formerly Pension Loans Scheme)?
The Home Equity Access Scheme, formerly known as Pension Loans Scheme (PLS), is a financial scheme offered by the federal government.
It allows Australian seniors or self-funded retirees to get a voluntary non-taxable fortnightly loan from Centrelink which can be used to boost their retirement income.
To be eligible for the Home Equity Access Scheme (also referred to as HEAS), participants must be in Age Pension age, eligible to get a qualifying pension, real estate (insured) owner in Australia, and not subject to personal insolvency agreement or bankruptcy. The HEAS requires the use of a property as security.
Participants can borrow up to 150% or 1.5 times of the maximum Age Pension paid fortnightly. However, this means restrictions to those on the pension with limited access to $36,121.80 per annum for singles and $54,451.80 for couples. They may choose the amount of loan payments to get each fortnight, though it cannot be paid as a lump sum.
The loan repayments include:
- the loan amount,
- accrued interest, and
- some legal costs.
Changes with the new Home Equity Access Scheme
When it was still PLS, the interest rate was 4.50% p.a. but now reduced to 3.95%. p.a. The interest compounds each fortnight on the outstanding loan balance. As long as the loan is not fully paid, the interest will accumulate.
There are no establishment fees or monthly account fees, however, Centrelink may charge costs including legal fees. These costs are worked out once the loan application is made and can either be paid immediately or added to the loan balance.
You cannot get a loan under the HEAS if you get a payment under the Asset Hardship Provisions at the same time. You can still apply for the HEAS and if your application is successful, you can choose which payment is best for you.
Effective 01 January 2021, the Pension Loans Scheme was renamed to be the Home Equity Access Scheme to extend eligibility to all Australians at pension age regardless of whether they receive an aged pension or are self-funded retirees.
Launched in 1985, the original Pension Loans Scheme assisted asset-tested age pensioners. The scheme was expanded in 1997 to include income-tested age pensioners. Over the first 30 years, the PLS met the needs of a very small number of Australian retirees, primarily rural farm owners.
A.S.A.G. Reverse Mortgage: An effective alternative to Home Equity Access Scheme
Australians are inherent home builders. Therefore, by the time they enter retirement, many people own at least one property that has accumulated wealth in the form of real estate equity. Given that most seniors depend on the three pillars of retirement income streams: the Age Pension, Superannuation, and Savings, unlocking some equity gives them the means to incorporate additional funds into their retirement planning and objectives.
As a reverse mortgage provider, A.S.A.G. offers this solution to allow you safe access to your home equity. The A.S.A.G. Reverse Mortgage is an equity release product tailored for Australian seniors to access the wealth in their home without ongoing repayments and having to sell. The amount you can borrow will be determined based on your age, the property’s value, and it’s location.
With our reverse mortgage loan, you are in control on how to use the payments with drawdown options either as a lump sum, regular instalments, or line of credit. The payments can be used in various ways, which may include:
The loan, including interest, is repayable at the end of the term when you permanently leave your home: either you sell your property, move to aged care, or pass away. Though not required, you can make voluntary one-off or early repayments at any time without penalty.
After the loan is active, you can still change your mind and exit the loan and/or sell your property at any time. If you do not proceed with the A.S.A.G. Reverse Mortgage, you are not required to pay any exit or discharge fees.
Putting your Retirement Confidence First
The A.S.A.G. Reverse Mortgage is well-regulated to protect our customer’s interest.
You can get started with your own assessment by learning how much available equity you have access to using our A.S.A.G. Reverse Mortgage Calculator.
A.S.A.G. holds an Australian Credit Licence and all our products are regulated. For further information, download our product guides for free, call us on 1300 002 724, or send your enquiries at info@asagfirst.com.au to learn how you could improve your standard of living through our equity release solutions.
Lifetime Occupancy
Retain the property title and live in your home and community until you either leave or pass away.
No Required Regular Repayments
The loan is paid off at the end of the term.
No Negative Equity Guarantee
You cannot owe more than your property’s worth.
A.S.A.G. Equity Protection Option
You may choose to protect up to 50% of the eventual net proceeds from the property sale.
Frequently Asked Questions
Meet these requirements to access the Home Equity Access Scheme:
- You or your partner are at Age Pension age.
- You’re eligible to get a qualifying pension.
- You or your partner owns a property in Australia that can be used as security for the loan.
- You have appropriate and adequate insurance covering the property.
- You are not subject to a personal insolvency agreement or bankruptcy.
You can get a loan even if your assets and income wouldn’t necessarily allow you to get one of the qualifying pensions.
You should agree to the HEAS’s terms and conditions. Your partner should also agree about you applying for HEAS and sign within the application, stating the understanding of the terms and conditions.
The loan payments you can get fortnightly under the Home Equity Access Scheme depend on how much pension you receive. Your combined pension and loan cannot be more than 150% of your maximum pension rate.
If your pension changes, your loan payments also change. This set up prevents the loan payments to go over 150% of your pension rate or the payment rate you choose.
However, if you don’t receive a pension, you’re allowed to get a maximum amount of HEAS as a loan payment. You can get loan payments until the total loan balance, including costs and interest, reaches the maximum loan amount.
You can also ask Centrelink to stop your loan payments at any time.
You can make regular repayments at any time, although you don’t have to. Instead, you can wait and pay it in full when you sell your property.
Partial costs of the loan are worked out based on the type and number of properties you used as security. If one property is used as security for the loan, you have 1 set of costs. If 2 properties are used as security, you have 2 sets of costs.
Pension payments are an important source of income for seniors. Before proceeding with a reverse mortgage, talk directly to Centrelink about its effect on your pension entitlements. A.S.A.G. also requires customers to consult with an independent financial professional for advice and understanding of the product and any impacts on existing or future pension.
The A.S.A.G. Reverse Mortgage is repayable at the end of the loan term when you permanently leave your home. Though it’s not mandatory, you are free to make voluntary one-off or regular repayments without penalty charge.
Do your own assessment using our free A.S.A.G. Reverse Mortgage Calculator by inputting your age and property’s value.
Use our A.S.A.G. Reverse Mortgage Calculator or call us on 1300 002 724 to talk about your Senior Refinancing plan. Learn how utilising your reverse mortgage could improve your income in retirement so you can Live The Life You’ve Earned.
What People Say About Us
I have been absolutely thrilled with not just the professional service offered by ASAG but also by their kindness and understanding. Compared to two other major Reverse Mortgage companies who between them took 13 months to decline my application due to me living in a resort I have found Gavin Luka at ASAG extraordinary in his patience with any amount of questions which were answered so promptly and in full. A very happy life ahead.
Kathy on Trustpilot
22 Mar 2022
We are very happy to “highly recommend” Gavin Luka for providing his thoughtful, empathetic, personable yet professional service during the acquisition of loan process. Gavin’s ability to ‘make it happen’ in a calm, seamless manner at a very stressful time for us – meant a lot.
Thankyou Gavin, what a ‘star’. Blessings to you
ASAG are very fortunate to have you on their team. Well done.
Carol Fleming on Trustpilot
9 Mar 2022
This was a very pleasant experience
This was a very pleasant experience. Plenty of guidance given along the way. Some anxiety but now looking back nothing to be concerned about. Thank you Gavin and his team.
Sandra Phillips on Trustpilot
7 Mar 2022
dealing with paul and gavin extremely easy
dealing with paul and gavin was extremely easy and also very pleasureable. if taking out a reverse mortgage i would reccomend asag to anyone.
Bob Manskie Manskie on Trustpilot
7 Mar 2022
I have used this company very recently and especially Gavin.He was so helpful in every way and talked me through everything that I needed to do.He was so polite , understanding and gentle with this gal as I was sick at the time but he just explained it all step by step and made the whole procedure as painless as possible though it wasn’t as easy a procedure as I’d hoped.They always answered the phone promptly and if Gavin wasn’t immediately available he’d always ring back very promptly.I can assure you this company is so easy to deal with.
Heather on Trustpilot
7 Mar 2022