The Home Equity Access Scheme (HEAS), formerly known as the Pension Loan Scheme, is set to expand the method by which funding payments are made to consumers.
“One of the negatives [of the scheme] in the past is that it didn’t give people a lump sum of money. A lot of people came to us, and have talked to us, about how they need $50,000 or $100,000 [from the scheme] tomorrow and it didn’t provide that,” Pension Boost business development director Nathan Wares told attendees at a retirement income breakfast hosted by his organisation and Household Capital.
“But going forward there are going to be some changes and the government will be offering lump sum payments [under the scheme],” he revealed.
Wares took the opportunity to explain the role the HEAS can play for retirees.
“It meets needs for people who need a regular income stream, either every fortnight or every month, [to pay for] in home care or other services. So it really does make a big difference for people who are coming in short [of this type of cashflow],” he said.
He also clarified who can qualify to participate in the scheme.
“People very much thought you had to be a pensioner to access the scheme. That’s one thing I really want to highlight that it is very much available for self-funded retirees.”
According to Ware, the scheme possesses another unique quality that should give it wider appeal among retirees.
“What makes this really quite unique as well, compared to a lot of reverse mortgage providers, is the government isn’t as picky as some of the reverse mortgage providers. [The government] will lend on any property pretty much anywhere in Australia,” he noted.
“So it’s not postcode restricted, it doesn’t need to have a drawing on it, so it really gives people lots of options.”
The Morrison government rebranded the Pension Loan Scheme to become the Home Equity Access Scheme in December last year. At the same time the interest charged on the loans was reduced from 4.5 per cent to 3.95 per cent.