Pension loan scheme
Centrelink and the Department of Veterans’ Affairs offer another way to release equity in your home through the Pension Loans Scheme. The scheme allows pensioners on a part pension and some people not eligible for a pension to increase their fortnightly income by applying for a loan. The loan is paid in fortnightly instalments, to bring the total payment up to the equivalent of the full pension. You cannot apply if you are a full pensioner, as you already receive the maximum amount of pension.
Under the scheme, real estate you or your partner own is used as security for the loan. You do not have to use the full value of your asset as security - you can have a guaranteed amount kept aside from the total value. This ensures an amount of equity is preserved in case you need or want it later.
Interest is charged on the outstanding amount and there are costs for securing the loan.
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