1.1.G.70 Guaranteed amount (PLS)

Definition

For the purposes of PLS, a guaranteed amount is the agreed amount of equity that a person can elect to have kept aside from the total value of a secured asset (1.1.A.290).

Example: A person has a property valued at $200,000 that he/she offers as security for his/her PLS debt. He/she wishes to nominate a guaranteed amount of $85,000 to allow himself/herself the flexibility of moving into a retirement village or hostel at a later date. When determining his/her eligibility for payment under the PLS, the value of real assets will be $115,000 (i.e. $200,000 minus $85,000). This is the difference between the total value of the property and the amount of equity he/she wishes to retain.

Act reference: SSAct section 1133AA(1)-'guaranteed amount'

Policy reference: SS Guide 1.2.3.50 Pensions loan scheme (PLS) - description, 3.4.5 PLS - Qualification & Payability

Last reviewed: 17 August 2015