If you’ve been looking into reverse mortgages or home equity loans, you may have come across the government’s Home Equity Access Scheme (HEAS), administered by Centrelink. This was previously known as the Pension Loans Scheme (PLS).
While there is a lot of information available on the Services Australia website about HEAS, it can be difficult to find someone to talk to about the ins and outs of the scheme and answer all those nitty gritty questions you might have.
Centrelink does recommend you seek legal and financial advice before entering into a HEAS arrangement. Unfortunately, many advisors are not fully aware of the complexities of the scheme and so may be reluctant to discuss or recommend it.
One of the frustrations many people find is that the application asks you to confirm that you have read and understand the terms and conditions, before you’ve been able to talk to a staff member who fully understands the details of the scheme.
For the purposes of this article, I’m going to assume you have some knowledge of the program and are considering lodging an application.
Getting the answers you need
The experts in this area are a small number of Centrelink staff specially trained in all the particulars of HEAS.
Here’s a tip: Lodging an application does not put you under any obligation to go ahead with a loan. But it does get you access to a HEAS Specialist officer who will be able to answer all your questions. It is actually part of the process – they will conduct a phone interview with you where they will explain all the terms and conditions and ask you if you wish to proceed.
This is your opportunity to ask all your questions. Make a list of anything you are unsure about or concerned about and get the answers before you commit. And don’t be afraid to ask them for thinking time if you need it.
The HEAS application process
As with all their payments and services, Centrelink would prefer that you apply online, but don’t feel you have to.
For those who prefer pen and paper, there are forms available on their website you can print out and fill in:
- Home Equity Access Scheme partnered application form (SA310) – Services Australia for partnered couples, or
- Home Equity Access Scheme single application form (SA496) – Services Australia for singles.
Be prepared for applications to take a long time to process. Recently, claims have been taking up to six months. Unlike Age Pension and other income payments, HEAS is not prioritised for urgent processing, although they will pay you from the date you claimed IF you ask them.
To limit delays, ensure you have provided ALL documents requested. Things to check on your documents include:
- Council rates notice – the valuation must be on the notice; don’t just provide the instalment bill.
- Evidence of insurance – the document must show current coverage of the buildings. Not your contents. For apartments, you may need to get the building insurance from your body corporate. If your insurance expires while you are waiting for your claim to be assessed, upload evidence of the renewal to your Centrelink account as soon as you get it.
- Title – if there is a mortgage or caveat shown on your title, you will need to provide details of what that is, OR evidence that it has been paid out. If you have a current mortgage, you will need to show the loan agreement with terms and conditions and the loan balance. You should also check that your current lender will allow you to enter into a HEAS arrangement – some don’t.
- Ensuring you have correctly filled in the form and signed in the right sections. Most people will need to sign at both Part A and Part B.
Patience is key
As mentioned earlier, HEAS is a very small component of the work that goes on at Centrelink with only a very small number of staff involved. Although all staff should be informed about the program, in reality many Centrelink employees will never have dealt with an enquiry about HEAS.
So you need to be persistent and follow these tips:
- Apply early and ensure you have all your questions answered.
- Be prepared to wait a significant amount of time for an outcome.
- If it really is dragging on, you can always try lodging a complaint.
Above all, make sure you have paid close attention to the questions and supplied all the documents.