188.8.131.52 How the HEAS is paid
- a fortnightly loan payment, and/or
- a lump sum advance.
Participating in the HEAS does not change a person's existing fortnightly income support entitlement.
This amount is paid in addition to any normal social security law entitlements. From 1 July 2019, a person (or their partner) can access the HEAS and top up any pension payment they receive to 150% of the maximum fortnightly rate of Age (including, pension supplement, ES, and RA, where applicable). Self-funded retirees can get the whole 150% as a loan.
The fortnightly loan amount can be changed at any time to any amount up to the maximum.
The portion of the fortnightly payment that is a loan is the difference between:
- the total fortnightly rate of pension including any relevant supplements a person actually receives, including the impact of income and assets tests direct deduction, proportional portability rate etc., and
- the total amount they have nominated to receive each fortnight up to an allowable limit of 150% of the maximum fortnightly pension rate.
Example: Janet is a 70-year old single maximum rate age pensioner with securable property. Her Age income with supplements is currently $987.60 per fortnight ($25,677.60 per year).
- Janet accesses the HEAS, using her property as security, and nominates to receive 150% of her current Age with supplements.
- Her income increases to $1,481.40 per fortnight ($38,516.40 per year), 150% of the maximum rate of the Age with supplements. $493.80 per fortnight is a loan under the HEAS and $987.60 per fortnight is her normal income support entitlement.
Act reference: SSAct section 1134(1) Effect of participation in pension loans scheme-pension rate
Policy reference: SS Guide 184.108.40.206 Calculating the maximum HEAS loan
Lump sum advance
A person may choose to receive HEAS payments as a lump sum advance. A person may access up to 2 lump sum advances in any 26 fortnight period. The combined total of the lump sum advances in a 26 fortnight period is capped at 50% of the maximum annual rate of pension (including basic pension rate, pension supplement, ES and RA, where applicable).
A HEAS participant receiving fortnightly payments who also accesses a lump sum advance will have their maximum fortnightly HEAS loan payment reduced for the following 26 fortnight period.
- A maximum rate pensioner who takes the maximum lump sum advance amount cannot receive any fortnightly HEAS payment for the next 26 fortnights.
- Part-rate pensioners and non-pensioners who take the maximum advance may still access fortnightly loan payments at a reduced rate. Their combined pension plus fortnightly loan payment is capped at 100% of the maximum fortnightly rate of pension.
Example: Keith is a 75-year old single maximum rate age pensioner with securable property. His Age income with supplements is currently $987.60 per fortnight ($25,677.60 per year).
- Keith is currently accessing fortnightly HEAS payments, nominating to receive 150% of his current Age with supplements. His Age plus maximum loan payment equals $1,481.40 per fortnight ($38,516.40 per year). This includes $493.80 per fortnight as the HEAS payment and $987.60 per fortnight as his normal income support entitlement.
- Keith wishes to access a lump sum advance of $5,000. The maximum lump sum Keith can access is $12,838.80 ($987.60 × 0.5 × 26 = $12,838.80).
- Keith's maximum fortnightly HEAS payment will reduce from $493.80 to $301.49 ($12,838.80 − $5,000) ÷ 26 = $301.49). Keith's fortnightly Age payment remains unchanged at $987.60.
- This will reduce the maximum amount of any second advance Keith chooses to receive in the same 26 fortnight period to $7,838.80 ($12,838.80 − $5,000 = $7,838.80).
Act reference: SSAct section 1134A Pension loans scheme advance payment
Treatment of RA, pension supplement & ES
A person may receive RA, pension supplement and ES as part of the actual amount payable under the normal income and asset test provisions.
If some pension is payable to a person under the normal income and assets test provisions, they also qualify for family assistance (FA) and CCS free of the FA income and assets test and for bereavement payments. These payments do NOT form part of the loan debt.
Note: Those receiving no income support amount, only loan payments through the HEAS, do not qualify for FA free of the FA income and assets tests.
Act reference: SSAct section 1210(1) Application of income and assets test reductions and of compensation reductions for income tax purposes, section 1134(1) Effect of participation in pension loans scheme-pension rate
The loan is paid from the first fortnight after the claim is granted, unless a customer requests otherwise, and the delegate is satisfied that the:
- person is qualified for HEAS, and
- loan is payable.