The government's Pension Loans Scheme (PLS) has been in operation in various forms since 1985, however until 2019 the eligibility rules made it restrictive for most Australian seniors to qualify.
The changes, introduced from 1 July 2019, mean that all Australian residents who own property and are of pension age could be eligible for the scheme. The PLS provides a regular payment of up to 150% of the full age pension (less whatever age pension you receive) each fortnight with a lump sum option being introduced from July 2022.
Since 2019, Pension Boost has been working with seniors to educate them on how the scheme could benefit them while handling the application process for those who decide to take up the PLS. To date, we've helped our clients access more than $90 million in PLS funding to help them unlock a better life.
Unfortunately, too little has been invested by the government to make sure that everyone eligible for the PLS is aware of the scheme or how it works. This leaves a lot of room for misinformation and myths to be spread among the community, which is why we've decided to bust a few of those myths for you.
Under the revised PLS rules introduced on 1 July 2019, seniors do not have to be receiving or eligible for the Age Pension to be eligible for the PLS. Self-funded retirees are eligible, provided they (or their partner if in a couple):
Pension Boost is seeing an increasing demand for PLS from self funded retirees.
Many seniors are under the impression that because they have an existing mortgage on their home or property, they're not eligible for the PLS.
This is definitely not the case with around 4 in 10 of Pension Boost's clients having an existing mortgage
Provided the above listed requirements are met, even with a mortgage on your property you're eligible. The biggest consideration for seniors with mortgages is the net equity available in their property.
By 'net equity', Centrelink/DVA means the value of your property minus all debts secured against that property, i.e. your mortgage.
To learn more about this and see an example, read our article on the PLS and existing mortgages.
There seems to be a myth out there amongst seniors, perhaps set by the banks and commercial providers' marketing efforts, that reverse mortgages are exclusively for people with homes in the wealthiest suburbs like Vaucluse in Sydney or Toorak in Melbourne.
Whilst commercial providers are generally restricted in the areas and property types they’ll accept for their reverse mortgage loans, that’s not true of the Pension Loans Scheme and our experience of assisting seniors in accessing the PLS backs this up.
Any real estate property, regardless of the location within Australia is eligible, provided you own it.
So, are you eligible for the PLS?
To help you find out, try our PLS Calculator today.