Home Equity Access Scheme / Pension Loans Scheme

The Pension Loans Scheme was renamed the “Home Equity Access Scheme” on 1 January 2022.

The Scheme allows senior Australians to supplement their retirement income by accessing the equity in their home through a Government loan. 

The Scheme is available to senior Australians who meet Age Pension age and residency requirements and own real estate in Australia. The Scheme allows a person of Age Pension age (or their partner) to nominate to receive an amount of fortnightly pension plus loan of up to 150 per cent of the maximum fortnightly rate of Age Pension (including the pension and energy supplements, and Rent Assistance, where applicable). Self-funded retirees can get the whole 150 per cent of the pension as a loan, while those on the maximum rate of Age Pension can get 50 per cent of the pension as a loan. Part pensioners can get a rate in between. 

The payments accrue as a debt secured against the person’s nominated Australian real estate. This debt accrues interest, with safeguards limiting the maximum loan a person can accrue. Participation in the Scheme is entirely voluntary. The debt is generally recovered from the sale of the secured property (unless it is transferred to a new property), or from the participant’s estate, although voluntary repayments can be made at any time.

The compound interest rate for the Scheme is currently 3.95 per cent per annum.

Changes from 1 July 2022 enabled participants in the Scheme to bring forward a portion of their fortnightly loan payments as a lump sum advance. Lump sum advances are capped at 50 per cent of the annual rate of Age Pension, and any advance taken will reduce the fortnightly loan amount a person can receive over the following 12 months.

In addition, the introduction of a No Negative Equity Guarantee ensures no participant will need to repay more than the equity they hold in the property they used to secure their loan.

Further information

For further information about the Scheme, please contact Services Australia on 13 2300 or online at the Services Australia website.

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