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Where will Australian Retirees Source the Income Needed to Support Their Lifestyle?

4th March, 2021

With 700 new retirees each day, this poses the question: where will they source their income if they are not ‘rich’?

These retirees – many of whom were not financially prepared when they stopped working – are seeking ways to live in their homes and find other sources of income to support their lifestyle.

With more than 3 million Australians over the age of 65, and more than 75% of them owning their homes or property (at values often multiples of their superannuation balances), the option to tap into their home equity to assist funding their retirement is something theys will need to consider. One such option is the federal government’s Home Equity Access Scheme (HEAS), previously known as Pension Loans Scheme (PLS).

What is the Home Equity Access Scheme?

The Home Equity Access Scheme, or the HEAS, has been in operation in various forms since 1985 and is one of the Australian Government’s best kept secrets. The intent of the HEAS is to help seniors fund their regular costs of living by accessing some of the equity they have in their home or property.

Historically, the HEAS hadn’t had significant take-up by seniors, due to its restrictive eligibility rules, and not being actively promoted by the Government. However, that all changed on 1 July 2019, as now all Australian seniors who own property can access the HEAS, including self-funded retirees.

The HEAS is a ‘reverse mortgage’ style contract where the Australian Government provides you with a loan amount each fortnight – at a maximum payment level of 150% of the Full Age Pension less any government pension you currently receive. The table below provides examples of how this works for different types of retirees.

Per Annum
Full Age Pension

HEAS maximum





Part Age Pension (example - $300/fortnight)

HEAS maximum





Self-Funded Retirees

HEAS maximum

$ nil


$ nil


ASFA Retirement Standard - Comfortable

The HEAS loan is secured against any property you own in Australia. Unfortunately, relocatable homes and (most) retirement villages are not eligible under the Scheme.

A ‘reverse mortgage’ simply means you are not required to make any repayments during the term of the loan, although you can if you wish to, and have the funds to do so.

Interest is charged on the outstanding loan amount each fortnight (currently the rate is 3.95% p.a. variable). As you do not need to make any loan repayments, the interest compounds over time (in other words, you’ll be charged interest on the interest).

You will generally be required to repay the loan when you (or your surviving partner if you’re in a relationship) either:

  • Permanently move out of your home; or
  • Sell your property; or
  • Pass away, in which case the proceeds of your estate will be used

Government-Provided Home Equity Access Scheme

The Australian government is the provider of the Home Equity Access Scheme and the Scheme is administered via the Department of Human Services/Centrelink and for veterans via the Department of Veterans Affairs (DVA).

Want to learn more about Home Equity Access Scheme? Check out our frequently asked questions today.


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