If you are of age pension age but, because of assets or income, are ineligible for Age Pension or to receive a reduced pension rate, you can access capital tied up in your assets to provide extra income.
The Pension Loans Scheme is a voluntary arrangement that provides support in the form of a loan for either a short time or an indefinite period. It is paid in regular fortnightly non-taxable instalments. You can nominate an amount up to the maximum Age Pension payment.
Eligibility & payment rates
Eligibility for Pension Loans Scheme
You may be eligible for a loan under the Pension Loans Scheme if:
- you or your partner is of age-pension age
- you have real estate in Australia to use as security for the loan
- you or your partner receives part Age Pension (or would receive part Age Pension, but your rate is reduced to nil because of either the income or the assets test, but not both)
- you are not receiving a reduced rate of pension solely because of a direct deduction and
- you meet Age Pension residence requirements.
You can only use real estate owned in Australia, such as your home, as security for the loan.
The Pension Loans Scheme is not available if you receive the maximum rate of Age Pension.
Pension Loans Scheme payment rates
You can nominate to receive a payment each fortnight up to the maximum amount of Age Pension (including supplements and Rent Assistance).
Repaying the loan
A loan under the Pension Loan Scheme can be repaid in part or full at any time. If you wish to sell the real estate that is used as security for the loan, you need to contact us before organising the sale so that arrangements can be made for the loan to be repaid at the time of the sale.
The loan may also be repaid from your estate after your death.
Other benefits while receiving the Pension Loans Scheme
If you qualify for the Pension Loans Scheme, you may be entitled to other payments and benefits, such as:
Claiming a Pension Loan
You can register an intent to claim a pension loan under the scheme. This will help you get paid from the earliest possible date.
Managing your payment
Change of circumstances for Pension Loans Scheme
You need to tell us when your circumstances change if you receive a loan under the Pension Loans Scheme. For example, you need to tell us before you sell the property you used as security for your loan.
- You need to let us know about any changes within 14 days in case they affect your loan payments.
Make an informed decision
We offer a free and confidential Financial Information Service (FIS). Our FIS Officers can discuss the terms and conditions of the Pension Loans Scheme with you and offer information on the issues you should consider when deciding whether to apply for the scheme.
To speak to an FIS Officer, call 132 300.