Home Equity Access Scheme (HEAS) — government reverse mortgage

What Is This Payment?

The Home Equity Access Scheme is a federal voluntary loan that lets senior Australian homeowners convert part of their home equity into cash flow without selling the property. Inside the rule database it is classified as a Group B rule with eligibility_only as the result role, meaning HEAS does not produce a deterministic dollar amount in the rule engine — the loan amount is determined by a Services Australia calculator that factors in property equity, age and the chosen payment mix. The parent cluster is Home Equity Access Scheme, and the entitlement scope is recorded at the household level on an ongoing basis.

The administering body is Services Australia. The rule records two channels: online through the myGov-linked Centrelink service and in person at a service centre. Veterans can apply through the DVA channel instead, with the eligibility logic and interest rate unchanged. Because HEAS is a loan rather than a grant, the intake process includes a property valuation step and a check of the existing title (the home cannot already be encumbered beyond a level that would compromise the federal security).

The rule is designed to fill a specific gap between the Age Pension and full home sale. A retired homeowner whose cash flow is below the maximum Age Pension rate — either because they are self-funded and not eligible for the pension, or because the pension does not stretch far enough — can top up income against the value of the home. The non-taxable nature of the loan means the drawn amount does not affect Age Pension entitlement, although the underlying equity is still part of the assets test for any concurrent Age Pension claim. Unlike commercial reverse mortgages with rates between 8% and 11%, HEAS sits at 3.95%, which is the policy lever that makes the scheme attractive.

How Much Can You Get?

The amount block is defined as eligibility_only with period: none. The rule engine does not output a dollar number; instead, it confirms eligibility and the borrower negotiates the loan amount through the official Services Australia HEAS calculator. Three caps drive the calculation:

• Fortnightly payment cap. Combined with any Age Pension paid, the fortnightly amount cannot exceed 150% of the maximum Age Pension rate. For a single homeowner already receiving the full Age Pension at $1,200.90 per fortnight, the maximum HEAS top-up is approximately $600.45 per fortnight, bringing total fortnightly cash flow to $1,801.35.
• Lump sum cap. Up to two lump sums per year, each capped at 50% of the maximum yearly Age Pension rate. For a single recipient that is roughly $15,611 per lump sum, or up to about $31,223 per year as combined lump sum draws.
• Mix-and-match. Borrowers can split the entitlement between fortnightly and lump sum payments. Drawing a lump sum reduces the available fortnightly headroom for that year proportionally.

Interest is the central numeric fact: 3.95% per annum compounding fortnightly. The notes record this rate as the policy rate at the rule's effective date. To audit how the loan grows, follow four steps. First, identify each fortnightly draw and lump sum date. Second, apply 3.95% per annum divided by 26 fortnights, equal to about 0.1519% per fortnight, to the outstanding balance each fortnight. Third, add the new draw amount to the new balance. Fourth, project forward to the expected exit date (typically the sale of the property, the borrower's death or the borrower's decision to repay early). At 3.95% compounding fortnightly the effective annual rate is roughly 4.03%.

Worked example: a single homeowner draws a $20,000 lump sum at the start of the year and adds $500 per fortnight thereafter. After one year the balance is approximately $20,000 × (1.0403) plus the accumulated fortnightly contributions of around $13,300, totalling about $34,100 owed at the end of year one. The borrower's home is the security; no interest payments are required during the loan term. The balance compounds until exit.

Two protective features cap the downside. First, the no negative equity guarantee in the rule notes means the borrower's estate can never owe more than the eventual sale price of the property. Second, the loan is voluntary — the borrower can stop drawing or repay early at any point. Because HEAS is not a grant, the dollar value cannot be quoted as a flat headline; it depends on home equity, age and how aggressively the borrower draws.

Eligibility Conditions

The eligibility block is an all set, so every item must pass. There is no income test and no assets test inside this rule because HEAS is a loan secured by real property rather than a means-tested benefit.

1. Residency status: residency_status in [australian_citizen, permanent_resident, special_category_visa]. Other visa classes are not accepted because the loan term may extend over decades and the federal balance sheet needs a stable residency basis.
2. Age Pension age: meets_age_pension_age = true. The rule note records that the borrower does not need to be on the Age Pension, but they must have reached the Age Pension qualifying age (currently 67). The flag is derived in preprocessing from date of birth.
3. Home ownership: is_homeowner = true. The home is the loan security. Renters, share-house residents and people who have already sold their home cannot use HEAS through this path.
4. Living in Australia: living_in_australia = true. Borrowers who relocate overseas long-term lose the ongoing payment because the security relationship and Services Australia's case management both require a domestic residence.

The excludes block is empty, the conflicts list is empty, and the affects list is empty. HEAS does not block any other federal payment and is not blocked by any other payment. It can sit alongside the Age Pension, the Disability Support Pension, the Carer Payment and the DVA Service Pension. Required fields are residency status, the derived Age Pension age flag, home ownership and living in Australia — a deliberately short list that reflects the loan's narrow gating logic.

Two practical considerations follow from the empty conflict and exclude blocks. First, the Age Pension assets test still treats the home as exempt and the HEAS loan balance does not reduce assessable assets, which means drawing HEAS does not improve or worsen Age Pension entitlement. Second, when the home is eventually sold the loan balance is repaid first; any residual equity flows to the estate or to the borrower's nominated beneficiaries.

How To Apply

Application metadata defines two channels: online through the myGov-linked Centrelink service and in person at a service centre. The intake involves a property valuation and a check of the existing title to confirm there is enough unencumbered equity for the loan to attach to. Decisions are not made on the day; Services Australia takes several weeks to process the initial application and arrange the property security.

Evidence requirements are explicitly listed in the rule and should be prepared in advance:

• identity document (driver licence, passport, or other Services Australia accepted identification)
• property evidence — recent rates notice, council statement or land title document for the home being used as security
• Age Pension assessment paperwork, which doubles as proof of age and residency for HEAS even if no pension is being paid

Two practical tips help. First, use the official HEAS calculator at Services Australia before lodging the application; the calculator outputs the maximum fortnightly draw and the maximum lump sum amount given the borrower's age and home value, which prevents over-borrowing in the first conversation. Second, consider whether the loan amount and projected compounding match the borrower's expected length of tenure. Drawing $500 per fortnight for ten years at 3.95% compounding fortnightly results in a balance of around $158,000, which has a meaningful effect on the residual estate.

Read the official Services Australia HEAS guidance

Rule-Based Scenarios

Scenario 1: self-funded retiree above the Age Pension assets cap

Keiko is 70, an Australian citizen, lives in her own home in Hobart valued at $850,000 and has $1.2 million in superannuation pension phase. She fails the Age Pension homeowner assets test of $722,000 and receives no pension. She still meets all four HEAS gates: she is 67+, a citizen, a homeowner and living in Australia. She draws $400 per fortnight, equivalent to about $10,400 a year, to supplement her drawdown from super. After one year her HEAS balance is roughly $10,610, growing at 3.95% per annum.

Scenario 2: full Age Pension recipient stacking a fortnightly top-up

Lev is 73, single, an Australian citizen and a homeowner with $380,000 in assessable assets and $120 per fortnight of income. He already receives the full Age Pension of $1,200.90 per fortnight. The fortnightly cap of 150% of the maximum Age Pension rate (approximately $1,801.35 combined) gives Lev around $600 in additional fortnightly HEAS room. He elects $300 per fortnight to fund home maintenance, lifting his total fortnightly cash flow to roughly $1,500.90 without affecting Age Pension entitlement.

Scenario 3: not eligible due to recent home sale

Selwyn is 68 and an Australian citizen who recently sold his home in Sydney and now rents a unit while waiting to decide where to retire long-term. He meets residency, age and living-in-Australia gates, but is_homeowner = false. The rule returns not eligible because HEAS is a secured loan and has no security to attach to. He would regain eligibility once he buys another principal place of residence.

Scenario 4: veteran applying through the DVA channel

Tasos is 65, a DVA Service Pension recipient and a homeowner. He has met Age Pension age, is an Australian citizen and is living in Australia. He applies for HEAS through the DVA channel rather than Centrelink. The rule eligibility passes identically; the intake paperwork is routed through DVA but the interest rate, the no negative equity guarantee and the fortnightly and lump sum caps are the same. He elects a single $25,000 lump sum to fund a kitchen renovation, which compounds at 3.95% per annum fortnightly until the home is eventually sold or the loan is repaid.

Common Mistakes

• Confusing HEAS with a grant: applicants sometimes assume the scheme pays an outright benefit. The rule note records the payments as a voluntary loan compounding at 3.95% per annum. The balance is repayable from the property estate, and the no negative equity guarantee caps the downside at the eventual sale price but does not erase the loan.
• Assuming the Age Pension is a prerequisite: the rule requires meets_age_pension_age = true but does not require the borrower to actually receive the Age Pension. Self-funded retirees who fail the pension means tests can still use HEAS, which is one of the most useful applications of the scheme.
• Drawing the maximum fortnightly amount indefinitely: the fortnightly cap of 150% of the maximum Age Pension rate is a ceiling, not a target. At full draw, the balance compounds quickly; ten years at $600 per fortnight compounding at 3.95% leaves a balance close to $192,000 against the home.
• Forgetting the compounding frequency: the 3.95% rate compounds fortnightly, not annually. The effective annual rate is closer to 4.03%, and over a decade the difference between simple and compound interest on a five-figure balance is several thousand dollars.
• Treating the home as already lost: the no negative equity guarantee in the rule notes protects the borrower's estate from owing more than the sale proceeds. The home itself is retained while the borrower lives in it; the loan only crystallises at sale, death or voluntary early repayment.
• Skipping the calculator before applying: the rule notes record that Services Australia uses an HEAS calculator to set the available fortnightly and lump sum room. Walking into a service centre without running the calculator first leads to mismatched expectations between the requested amount and the property equity available.

Related Rules And Interactions

The conflicts list and affects list are both empty for HEAS, which means the loan can run alongside any other federal payment without blocking or being blocked. The interactions are economic rather than gating: the loan supplements pension income and is repaid from the property estate at exit.

• Age Pension - single — runs in parallel with HEAS; pension income plus HEAS fortnightly draw is capped at 150% of the maximum Age Pension rate combined.
• Age Pension - couple (each) — the partnered version of the pension; couple HEAS draws are capped against the combined couple pension rate.
• Commonwealth Seniors Health Card — single — self-funded retirees who hold the CSHC and use HEAS for income; the loan does not affect CSHC income testing because it is not income.
• DVA Service Pension — single veteran — veterans can apply for HEAS through the DVA channel while continuing to receive the Service Pension.
• Pension Supplement — companion top-up for Age Pension recipients; combines with HEAS to lift overall retirement cash flow.
• Pensioner Concession Card (PCC) — issued automatically with the underlying Age Pension or Service Pension when one is paid; HEAS does not on its own trigger the PCC because HEAS pays no benefit.

Frequently Asked Questions