These definitions apply to all payments subject to assets testing provisions.
The usual types of encumbrances are:
- a registered mortgage
- a bank overdraft secured by lodgement of title deeds
- accumulated interest
- arrears of rates
- other outstanding local government charges
- amounts outstanding to water, sewerage or electricity authorities if the charges are recoverable by statute against the property
- a solicitor's lien for costs and fees
- a banker's lien for money advanced, and
- legally enforceable liens against stock and other farm assets.
Excluded security loans
An excluded security is the amount of a charge or encumbrance that is:
- a collateral security (fall back security that is provided in addition to the principal security)
- provided for the benefit of a third party.
Act reference: SSAct section 1121 Effect of charge or encumbrance on value of assets