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Home Equity Conversion loans 108-04100000

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This document outlines the procedures for the treatment of Home Equity Conversion loans (HEC) under the Income and the Assets tests.

Information on HEC

A Home Equity Conversion (HEC) loan agreement is a mechanism which allows a homeowner to convert all or part of the equity locked up in their home into cash or a stream of income. A key feature of a home equity conversion agreement is that the loan (including interest) is generally not repayable until the homeowner moves out of their home or dies.

From 23 September 1999, HEC loans are no longer assessed under the income test.

Customers with a HEC arrangement are still considered to be homeowners for assessment purposes.

HEC loans are currently not available through the Services Australia.

Contents

Assessment of income from Home Equity Conversion loans

Assessment of asset value for Home Equity Conversion loans and Reverse Mortgages