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Read examples of how a lump sum advance payment can affect your maximum fortnightly loan rate.
Example 1 - a current customer who gets the Age Pension and HEAS fortnightly payments and applies for a HEAS Advance Payment
George currently gets the maximum $1,178.70 single rate of Age Pension each fortnight ($30,646.20 yearly). George also gets the maximum $589.35 ($15,323.10 yearly) rate of loan payments through the Home Equity Access Scheme each fortnight.
This means George gets the full fortnightly payment of 150%. That is the fortnightly pension rate multiplied by 1.5 - $1,178.70 x 1.5.
However, George has decided that he wants a lump sum payment of $10,000.
We add the amount to George’s loan balance which accrues compound interest each fortnight.
The advance payment amount reduces George’s fortnightly loan payment for the next 26 fortnights. This is the $10,000 advance payment amount divided by 26. The reduction applies for a period of 26 fortnights. This means:
- $15,323.10 yearly - $10,000 (advance payment) = $5,323.10 divided by 26 = $204.73 for 26 fortnights
- George gets the combined fortnightly payment of $1,383.43, which is the $1,178.70 Age Pension amount plus the $204.73 reduced HEAS loan amount.
George used the equity in his principal home as security against the loan. This means the advance loan payment is an assessable asset for pension purposes. We record the advance payment amount on George’s record for assessment under the income and assets tests.
The advance amount is exempt under the asset test for the first 90 days. After 90 days, the assets test will apply, and this may affect George’s pension amount. George can view the details in his Centrelink online account and make updates at any time.
Example 2 - a customer who is not getting a pension and applies for an Advance Payment
Olli has a partner and does not get a pension or participate in the Home Equity Access Scheme. Olli applies for the Home Equity Access Scheme online to get the maximum advance loan payment available.
The maximum annual pension amount for a partnered person is $23,101.00. This means Olli can get a maximum advance amount of $11,550.50. That’s 50% of the partnered maximum pension rate.
We pay the advance payment in a lump sum and the loan balance for Olli to repay is set to $11,550.50. Interest starts accruing on the loan balance and compounds every 14 days.
As Olli got the maximum advance amount in one payment, Olli cannot get another advance payment for 26 fortnights. Olli can request at any time to get regular loan payments each fortnight.
If Olli chooses to get fortnightly payments, the maximum amount Olli can get is reduced for the advance already received for a 26-fortnightly period.