Home Equity Access Scheme

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This page explains what the Home Equity Access Scheme (HEAS) is, who is eligible and how you can apply.

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What is the Home Equity Access Scheme

The Home Equity Access Scheme (HEAS) is a voluntary scheme for older Australians. You or your partner can use this scheme to supplement your retirement income through a loan from DVA.

You can apply for non-taxable loan payments from us by using your property as security.

You choose how long you want to receive loan payments. It could be for a short time for particular expenses, or indefinitely. You can repay the loan in full or part at any time.

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Who is eligible

To be eligible for a loan under the HEAS, you must be one of the following:

  • a veteran who has reached qualifying age and is eligible for service pension
  • a partner of a veteran who is eligible for partner service pension where the veteran has reached qualifying age
  • a widow(er) or ex-partner of a veteran who has reached pension age and is eligible for partner service pension
  • a war widow(er) who has reached qualifying age and is eligible for income support supplement
  • entitled to receive an age pension from us.

You also need to have property in Australia you can offer as security for the loan. You cannot be bankrupt or subject to a personal insolvency agreement.

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What you can use as security

You can offer real estate you and/or your partner own in Australia as security. This includes the home you live in. If your property is owned with someone who is not your partner, jointly or as tenants in common, we may not accept the property as security for the loan.

If you have a stake in property owned by a company or trust, you can use it as security if the trust agrees to cover your full loan.

When you apply for the loan we will arrange for the property to be valued. If the loan goes ahead we'll arrange for the valuations annually.

We register a debt against the property. You will need to pay for the cost for this. You can choose to either pay this amount up front or add it to the total loan amount.

You must maintain adequate and appropriate insurance on the property.

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How much you can receive each fortnight

Your combined loan and pension payment each fortnight can be up to 150% of your maximum pension rate.

If your pension changes, your loan payments will automatically adjust. This makes sure it doesn’t go over the 150% of your pension rate, or the payment rate you choose.

If you don’t receive a pension you can access up to the maximum amount of the HEAS as a loan payment.

You can receive loan payments until your total loan balance reaches your maximum loan amount. This includes interest and costs. We continue to apply interest to the outstanding balance until you repay the loan in full.

Example:

John is a single pensioner who currently receives $120 service pension per fortnight. He can use a HEAS loan to increase his payments to 150% of the maximum single rate of service pension, which is $1,539.75 per fortnight. John can receive HEAS loan payments of up to $1,419.75 per fortnight, which is $1,539.75 minus the $120 pension he receives.

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Taking some as a lump sum

You can request to receive a portion of your fortnightly loan payments as a lump sum. This is capped at 50% of your annual maximum pension rate. You can receive a maximum of two lump sum payments in a 12-month period. Any lump sum you receive will reduce the fortnightly loan payments you can receive over the following 12 months.

If you have an existing HEAS loan and you want to request a lump sum payment you need to complete the D9390 HEAS Advance Payment Request form

You can also ask for a lump sum payment when you apply for a loan.

Email your completed form to income.support.new.claims [at] dva.gov.au or mail to GPO Box 9998 Brisbane QLD 4001.

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How is interest calculated

We calculate interest fortnightly on the outstanding loan balance each pay day. The outstanding loan balance is based on the amount of loan payments you received before the pay day plus accrued interest, less any repayments.

The interest rates are published in the Australian Government Gazette. The current interest rate for the HEAS is 3.95% per annum.

The longer you take to pay a loan back, the more interest you will accrue and will need to pay back.

Example:

Mary gets her first fortnightly loan payment of $750 from the HEAS on a fortnightly pay day.

On the next fortnightly pay day Mary is charged interest of $1.14 on her loan balance of $750. Mary also gets another $750 loan payment. Her outstanding loan balance is then $1,501.14.

On the next fortnightly pay day Mary is charged interest of $2.27 on her loan balance of $1,501.14. Mary also gets another $750 loan payment. Her outstanding loan balance is then $2,253.41.

The interest will continue to accrue in this way each fortnight until Mary pays the loan off. This applies even after the maximum loan amount is reached and payments are stopped.

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Your maximum loan amount

The maximum loan amount you can receive depends on the:

  • value of the property you offer as security
  • equity you want to keep in the property
  • age component amount.

You can choose to offer the whole value of your property as security. Or you may choose an amount which allows you to keep some equity in the property. We refer to this amount as the retained amount. We do not include the retained amount when we calculate your maximum loan amount.

Age component amount

Age component table - for couples it is based on the age of the younger person
Current age The age component amount
55 or younger $1,710
56 $1,780
57 $1,850
58 $1,920
59 $2,000
60 $2,080
61 $2,160
62 $2,250
63 $2,340
64 $2,430
65 $2,530
66 $2,630
67 $2,740
68 $2,850
69 $2,960
70 $3,080
71 $3,200
72 $3,330
73 $3,460
74 $3,600
75 $3,750
76 $3,900
77 $4,050
78 $4,210
79 $4,380
80 $4,560
81 $4,740
82 $4,930
83 $5,130
84 $5,330
85 $5,550
86 $5,770
87 $6,000
88 $6,240
89 $6,490
90 or older $6,750

Example:

Joan is 70 years of age, her property is valued at $500,000 and her retained amount is $85,000. We base the maximum loan amount on the remaining $415,000 and her age component of $3,080. To calculate her maximum loan amount we round the security down to the nearest $10,000 making it $410,000. We divide this amount by $10,000 and then multiply the result by her age component of $3,080 to get her maximum loan amount of $126,280.

The maximum loan amount increases on each birthday taking into account the new age component and the latest valuation on the secured property. If the value of the secured property reduces, we will reduce her maximum loan amount.

When she reaches her maximum loan amount we stop making loan payments. We will ask her if she wants to change the value of her retained amount. The loan will continue to incur interest each fortnight until it is repaid in full. This means her loan balance can increase above her maximum loan amount even if she has ceased receiving loan payments.

This is an example only and you can choose to have a lower maximum loan amount than the amount we calculate by increasing your retained amount.

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How the HEAS may affect your income support payment

If the secured property is not your principal home and is assessed under the assets test, we will deduct the HEAS debt from its asset value. As the loan increases the net value of the property reduces. This may allow you to receive a higher rate of service pension, age pension paid by us, or income support supplement where your payment is assessed under the assets test. This places less reliance on the HEAS loan payments to maintain your total income.

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Selling or transferring ownership of your property

If you sell or transfer your secured property you will need to repay your HEAS loan in full on settlement. If your loan balance exceeds the value of your equity in the secured property, you will not need to repay more than the value of the secured asset.

If you choose to offer an alternative property as security for the loan, we will recalculate the maximum loan amount on the value of the new secured property. You will need to pay for the cost of registering a charge or caveat on the new property. This can be paid up front or added to your loan balance.

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What happens if you die

If you die, we usually recover any outstanding loan from your estate. Interest will accrue until the loan is repaid.

If you have a surviving partner who is eligible, they can choose to stay in the scheme. If they do, we will continue to make loan payments to them. We may need to recalculate the maximum loan amount if the surviving partner was the older member of the couple. On their death we will recover the loan from the estate.

If your surviving partner does not wish to stay in the scheme but has continued use of the secured property (e.g. the secured property is the family home), we will not seek repayment until your surviving partner dies or sells the secured property. However, your surviving partner may make voluntary repayments at any time if they wish.

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Repaying your HEAS loan early

You can make part or full repayment of your HEAS loan at any time with no penalty for early repayment. You can continue to participate in the HEAS or take out another HEAS loan later.

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HEAS and DVA cards

Having a HEAS loan does not entitle you to a DVA treatment or concession card.

Go to Veteran cards for more information and to find out if you are eligible for other DVA benefits.

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How to apply

Before applying for a HEAS loan you should consider:

  • your current and future financial situation
  • the impact of compound interest on the loan
  • repayment of the loan.

We recommend you seek independent legal and/or financial advice.

To apply for a HEAS loan you need to complete one of the following forms:

Email us your completed form to income.support.new.claims [at] dva.gov.au or mail to GPO Box 9998 Brisbane QLD 4001.

When we receive the form we may contact you to ensure you are aware of the terms and conditions associated with payment of the loan and its recovery.

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What documents you will need

When you apply for the HEAS we may request you to provide documentation to help us assess your application.

Proof of identity

Go to Proof of identity for information of the types of documents we may ask for. If you already receive a service pension, income support supplement or social security age pension from us, you will not need to provide any proof of identity documents. If you receive any other payment from us, we may ask you to provide a document from Category B. If the Category B document does not show your residential address, you must also produce a document from Category C.

If you do not receive any payments from us, you will need to provide full proof of identity documents i.e. one Category A and two Category B documents.

Other

We will need supporting documentation to confirm the information you provide on the application form. When you complete the application form, we’ll let you know if any supporting documentation is required for each question.

We usually need documentation as evidence of:

  • mortgages
  • any other debt owing on the property
  • your last rates/valuation
  • building insurance.

We can process your application sooner if we receive relevant supporting documentation with the application.

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What you need to tell us

Once you apply for and been granted the loan, you will need to keep us up to date with your circumstances. You need to tell us within 14 days (28 days if you live overseas or receive remote area allowance) about any change in your circumstances that may affect your loan. The types of things we need to know are if you:

  • want to transfer ownership of the property you used as security for the loan
  • change your name
  • or any co-owner of the secured real estate become bankrupt or subject to a personal insolvency agreement
  • intend to change the title details of any secured real estate
  • intend to take out, or change the details of, a mortgage on any secured real estate
  • intend to use the secured real estate to guarantee a loan taken by yourself or another person
  • learn that the insured value of the property falls below the replacement value of all buildings on the property
  • intend to change the property you offered as security for the loan
  • close, change, or can no longer use the account we make your payments to
  • become partnered, separate from your partner or your partner passes away
  • change your contact details or your residential or postal address
  • leave the country, temporarily or to live somewhere else
  • are sent to prison or charged with an offence and are in custody on remand.
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How to contact us

You can tell us of these changes or get further information by any of the following options.

  • send us a request using the general enquiry form
  • message us in MyService by selecting the ‘Help’ button
  • email us at income.support.new.claims [at] dva.gov.au
  • call us on 1800 VETERAN (1800 838 372) and say ‘Home Equity Access Scheme’ when we ask why you are calling
  • visit us in person at a DVA office
  • write to us at GPO Box 9998 Brisbane QLD 4001.
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