The Home Equity Access Scheme (HEAS) helps seniors finance education, combating financial struggle and keeping the mind active to avoid decline.
Retirement may be a time to relax after a lifetime of grind, but it’s important to keep the mind active and avoid cognitive decline. Continuing education is one great way to do this. Unfortunately, many seniors struggle to finance their studies. However, the Home Equity Access Scheme (HEAS) can be a great way for seniors to finance their education.
What is the Home Equity Access Scheme (HEAS)?
The Home Equity Access Scheme (HEAS) is a government programme that allows eligible seniors to access a portion of the equity in their home to help finance their retirement. The scheme is designed to help seniors who own their own home but may be struggling to finance their retirement.
Under the HEAS, seniors can receive a loan from the government that is secured against the equity in their home. This loan is known as a Centrelink loan, and it is interest-free and generally does not need to be repaid until the home is sold or the senior passes away.
Continuing Education for Seniors
Studies have shown that continuing education can help improve cognitive function and reduce the risk of dementia and other cognitive disorders. This is because continuing education requires the brain to remain active and engaged, which can help improve memory, attention, and other cognitive skills.
Continuing education can also provide opportunities for social engagement, which can help combat loneliness and isolation. Seniors who participate in continuing education programs can meet new people, form new friendships, and connect with others who share similar interests. The Sydney Anglican Diocese says that bonding with other people through a continuing education is beneficial for Australian retirees looking to interact with more like-minded people.
Continuing education can also provide opportunities for personal growth and development. Seniors who participate in continuing education programmes can learn new skills, explore new hobbies, and pursue new interests. This can help them feel more fulfilled and engaged in their retirement years.
Tapping HEAS for Seniors Education
Seniors who are interested in continuing education can use the HEAS to finance their studies in several ways.
The HEAS can be used to pay for tuition and other fees associated with continuing education programmes. This can help seniors who may be struggling to finance their studies out of pocket.
Many seniors who are interested in continuing education may also need to shoulder living expenses such as rent, utilities, and food. While HEAS is generally for retirement income, it may cover these expenses and make it easier for seniors to focus on their studies.
Depending on the type of continuing education programme, seniors may need to purchase equipment or supplies such as textbooks, laptops, or art materials. The HEAS can be used to help cover these costs, which can make it easier for seniors to participate in their chosen programme.
How to Apply for the HEAS
Seniors who are interested in applying for the HEAS can do so through the Department of Human Services. The application process typically involves providing documentation to demonstrate eligibility, such as proof of age, home ownership, and income.
Once approved, seniors can receive a loan of up to a certain amount (which varies depending on the state or territory) that is secured against the equity in their home. Seniors can then use the funds to pay for their continuing education, as well as other expenses associated with retirement.
To be eligible for the HEAS, Services Australia has laid down the main requirements:
- Age-qualified for Age Pension at time of application – at least 67 years old as of 1 July 2023
- Have a registered residential property in Australia and lived in it for at least five years. The property itself that will be used for security must be under adequate insurance coverage (at least 90 per cent of the overall value).
- Have no bankruptcies or personal insolvencies currently in effect.
- Have a combined income and assets below a certain threshold (which varies depending on the state or territory).
- Additionally, seniors must be able to demonstrate that they have a genuine need for the loan and that they are unable to access other forms of finance.
HEAS Precautions
While the HEAS can be a great way for seniors to finance their education, there are some precautions to heed.
When seniors access Centrelink loans through the HEAS, the loan is secured against the equity in their home. This means that the loan will need to be repaid when the home is sold or when the senior passes away. Seniors should consider the impact that this will have on their inheritance and discuss this with their family members.
Seniors who take out a Centrelink loan through the HEAS should understand the repayment terms. While the loan is interest-free, it will need to be repaid when the home is sold or when the senior passes away. Seniors must comprehend loan terms and long-term financial implications before committing.
Seniors who are considering using the HEAS to finance their education should also look ahead. It’s important to consider how education will impact their retirement goals and overall financial situation. For instance, if a senior is interested in pottery classes, will they be able to use the knowledge for a potential income generator like a new pottery business? Seniors should work with a financial advisor to develop a comprehensive retirement plan that takes into account their continuing education goals.
Any HEAS-related financial advisory, including education moves, may have added latitude from the government. Professional Planner’s Chris Dastoor covered a January 2023 notice from ASIC, stating that Centrelink loans, being statute debts, are allowed under the Social Security Act 1991(Cth)’s Part 3.12, Division 4 instead of the National Credit Code. The notice was issued out of industry concerns of Centrelink actually being a credit product (and therefore under National Credit Code rules) and many Australian financial advisers could have been hamstrung because many of them do not have credit advisory licences.
Conclusion
The pursuit of knowledge knows no age limits, even for those who have accomplished much in life. The Home Equity Access Scheme empowers seniors to finance their ongoing education. By leveraging their home equity, seniors can secure the resources necessary for tuition, living expenses, and other educational costs.
The A.S.A.G. Reverse Mortgage
The A.S.A.G. Reverse Mortgage can help seniors prepare for new education opportunities using the HEAS system. Your reverse mortgage advisor will guide you on the mechanics of taking out a home loan and how to gradually repay it back.
Please call the A.S.A.G. at 1300 002 724 or email to info@asagfirst.com.au to explore your finance options.
Use our equity assessment tool below to estimate the equity for your loan.