How to get a pension loan using the Home Equity Access Scheme
Updated on 1 July 2025 | 3 minute read
How you choose to fund your retirement will look different for everybody. If you own property, you may want to use it to get a loan that'll supplement your income in retirement. Here's how it's done.
The Home Equity Access Scheme (HEAS) is a voluntary, tax-free loan for older Australians. The Australian Government offers this loan for pensioners (or those who qualify for a pension but don't receive any payments) and uses your house as security.
What's the HEAS?
When you retire, there are 3 pillars of income that fund your lifestyle. They are:
- Superannuation (money that's put aside in a super fund for your retirement, made up payments from your employer, money you put in yourself, and money your super investments earn)
- Personal savings
- Age Pension
If you haven't been able to save enough money during your working life, or if you need more money than you have, then you might consider the HEAS to top up your income.
The HEAS used to be known as the Pension Loan Scheme until January 2022.
It's a tax-free pension loan that lets older Australians borrow money from the government.
If you own your house, it's used as security for the loan.
You usually repay the loan (plus interest1) later, from the sale of the house or your estate.
Are you eligible for the HEAS?
To be eligible for the HEAS:
you or your partner are Age Pension age or older.
you or your partner are eligible for the Age Pension, Carer Payment, or Disability Support Payment. Even if your assets or income mean you aren't actually getting any pension payments, you can still be eligible for a HEAS using this criteria.
you or your partner own real estate in Australia, which you can use as security for the loan. This means your name must be on the title of the land.
you, your partner, or any co-owner of the property aren't bankrupt or subject to a personal insolvency agreement.
you've got adequate insurance that covers the real estate offered as security (that means it covers at least 90% of the value of any buildings on the property you’re offering as security).
How much money can you borrow under the HEAS?
The government calculates the amount you can borrow using factors like the value of your home, your age, and any existing loan details.
You can opt to have the payment given to you either fortnightly, as a lump sum, or a combination of both.
If you opt for a HEAS lump sum in advance, there are a few extra things to consider, so make sure you check the details with Services Australia.
Case study example: Sandy2
Sandy is 71 years old and lives alone in a 4-bedroom house in the suburbs. They have no other mortgages. Sandy's currently getting the Age Pension but would like to take a few more interstate trips to visit grandkids. So, Sandy decides to apply for a HEAS loan to top up the pension payments.
Because Sandy is already getting the Age Pension, has their name on the title of the property, isn't bankrupt, and has adequate insurance, they're accepted.
Based on the value of the home, Sandy has a maximum loan amount (MLA) of $250,000 under the scheme.
Sandy decides to get it paid in fortnightly instalments, at the same time as the Age Pension.
The loan charges compounding interest of 3.95% p.a. Sandy doesn't make any repayments.
Sometime later, Sandy decides they want to move into their daughter's house. They sell the 4-bedroom house for $200,000.
Because of the no negative equity guarantee, Sandy doesn't have to repay more than the market value of the property.
Sandy owes:
$200,000
Repaying the HEAS loan
You can repay your HEAS loan in part or in full at any time. You can make payments through your Centrelink account in myGov, by mail, or at a Services Australia centre.
If you die before it's repaid, Centrelink will contact your estate after 14 weeks. Repayments can be deferred if your partner is Age Pension age and still lives in the property. Keep in mind, interest will continue to be added to the loan amount, even if repayment is deferred.
Selling a property with a HEAS loan
If you sell, you can transfer the HEAS loan to another property, or repay the loan with the proceeds of the sale.
A no negative equity guarantee applies to HEAS loans, which means you won’t repay more than the market value of the property (as long as you don't have any other mortgages on it).
Is a HEAS loan the right move?
Before applying for a HEAS loan, consider:
Your current and future financial situation.
The impact that a loan (and interest) could have on your lifestyle, goals, and loved ones if you leave the estate to them when you die.
How you will repay the loan.
Whether selling your property is right for you.
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