Last night, the Treasurer the Hon Josh Frydenberg, released the 2021 Federal Budget. Whilst there has been much fanfare around big spending commitments leading up to its release there were some very positive developments for the Pension Loans Scheme.
Pension Boost welcomes the proposed changes to commence from 1 July 2022, as they represent 4 of the 5 key changes we’ve been advocating for on behalf of seniors:
Whilst we are very pleased with the announced No Negative Equity Guarantee, lump-sum option, and investment in awareness-raising reforms we will continue to advocate on behalf of seniors for the PLS interest rate to be benchmarked to the RBA Official Cash Rate (or similar) to improve transparency for seniors. Whilst the PLS rate remains the lowest in the reverse mortgage market (currently 4.50% pa) and has the lowest level of fees and charges, the rate hasn’t been adjusted since it was last reviewed on 1 January 2020. Since then the government has failed to pass on the three COVID-19 emergency reductions to RBA Official Cash Rate during the period March to November 2020 (totalling 0.65%).
If you have any questions on the above feel free to contact us. Or if you’re curious to see if you’re eligible for the PLS, and understand what you could get out of the scheme, try our PLS calculator by clicking on the button below.