Household Capital welcomes the Government’s revamped Centrelink Home Equity Access Scheme
The Morrison Government has announced that the Pension Loan Scheme will be relaunched in 2022 as the Centrelink Home Equity Access Scheme.
“Since 2016, Household Capital’s mission has been to deliver the three pillars of wealth to Australian retirees: that means access to the pension, superannuation and home equity,” said Dr Joshua Funder, CEO of Household Capital. “The Retirement Income Review in 2020 and now the expanded Centrelink Home Equity Access Scheme reverse mortgage (formerly the Pension Loans Scheme) improve the breadth of options available to Australian retirees to fund their future.
“It’s important that all providers working to improve funding for an ageing population deliver a clear customer understanding of their complete financial situation and provide responsible, long-term access to their funds to give confidence in retirement funding.
“We have been working with the government to ensure there is a growing and vibrant market which can provide a range of options for retirees to use their home equity to fund their retirement. We welcome growth across the market, innovation and increased consumer awareness. The Centrelink Home Equity Access Scheme is a good low cost option for Age Pensioners seeking to augment their retirement benefits with a small amount of funds,” said Funder.
Looking at the international market, Funder said, “The UK, Canadian and Australian private markets have all innovated to provide improved access to home equity and deliver significant new sources of retirement funding. In the US, the federal Home Equity Conversion Mortgage has failed the needs of many retirees. We need to work with the Australian government to make sure the Centrelink Home Equity Access Scheme learns the lessons from other markets.”
Complementary home equity access
While both solutions allow retirees to access home equity, they are significantly different products and provide complementary options for retirees.
“While the Centrelink Home Equity Access Scheme is where the government puts a form of reverse mortgage on your home, it meets the needs of very different customers. Most retirees coming to Household Capital want flexible access to income and capital, now and in the future, expect the funds to be in their account in days and demand impeccable service. We also deliver full responsible lending and the consumer confidence that comes with it. The key differences are loan size, flexibility, speed of delivery, consumer confidence and service level,” said Funder.
Household Capital can provide flexibility, giving access to the approved funds in whatever amounts and time frames suit best. This could be a lump sum, a monthly, quarterly or annual income stream, a cash reserve or a combination of all three. The Centrelink Home Equity Access Scheme allows payments either in two lump sums or in regular limited (fortnightly) payments.
Household Capital loan amounts range from $50,000 to over $1 million, whereas the Centrelink Home Equity Access Scheme payments are capped at 150 percent of the Aged Pension. Calculated against a full pension, this means a limit of approximately $18,000 per year.
“We hear time and time again that our customers value and appreciate the genuine care that is provided to them. Our team of retirement specialists provide a fairly intensive hand holding service and help our customers through every step of the process. Older customers particularly may need extra support and we are here to help. The proof is in the pudding – our customer reviews are off the charts positive,” said Funder.
