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