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Home / Retiree / Other income in retirement / Home Equity Access Scheme (HEAS) explained

Home Equity Access Scheme (HEAS) explained

Kate CrawfordKate Crawford

Many Australian retirees have significant wealth tied up in their homes and sometimes other real estate, but find themselves ‘cash-poor’, unable to enjoy their ideal standard of living because of a lack of income.

If you’re willing to use some of your home’s value to improve your lifestyle, but you’d rather not move, or you have another property you could borrow against, a tax-free income boost from the Home Equity Access Scheme (HEAS) could be just the solution.

Need to know

The Home Equity Access Scheme (HEAS) was originally called the Pension Loan Scheme (PLS) but was rebranded as HEAS in December 2021.

What is the Home Equity Access Scheme?

The HEAS is a reverse-mortgage-style loan offered by the federal government that provides a tax-free fortnightly income funded by a loan against equity in a property owned (fully or jointly) by the borrower.

Limited lump sum advances are also available.

Good to know

A reverse mortgage works a little like a home loan in reverse. It’s a loan that allows you to borrow money against the equity (or value of a property less any mortgage debt) you have in your home (or another property).

Borrowers are required to pay interest on the loan, but regular repayments are not required. Instead, interest is added to the loan amount. The loan must be repaid when the property is sold.

Learn about reverse mortgages.

Before taking out a loan, it is important to understand the likely future financial impact. Free calculators are available from Centrelink and ASIC that can help.

Watch our videos demonstrating these tools.

How does the Home Equity Access Scheme work?

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About the author

Kate Crawford
Kate Crawford
Kate has worked in the superannuation sector since 2003. Her experience ranges from customer service to financial advice, member education, complaints management, trustee services, and learning and development. She currently develops content and facilitates learning sessions for super professionals with the Association of Superannuation Funds (ASFA) as well as writing for SuperGuide.
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Response

  1. Anthony Snape Avatar
    Anthony Snape

    The PLS is a good scheme if used wisely. A problem arises if you wish to make regular repayments to control the balance. In my case I have found a financial institution that issues fee free bank cheques (currently you can only repay by bank cheque or money order) but nowhere on Centrelink’s websites is there any information about who to make the cheque out to, where to send it, how long it will take to be credited or how to check the account balance.
    Why is this? (Answer : follow the money!).

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