Settlement of Home Equity Access Scheme (HEAS) loan amounts 065-08020050

HEAS customers wanting to settle their HEAS loan must be placed in contact with the Home Equity Access Scheme National team to initiate settlement.

Settlement can occur for the below reasons:

• Sale of the secured property
• Customer is deceased and there is no surviving partner
• The surviving partner would like to settle
• Recovery from the surviving partner’s estate
• The customer and/or partner have decided they no longer require this service and have the funds to repay the HEAS loan
• Transmission of title if a separation occurs, or partner is deceased

Note: if the customer is partnered, the partner must provide consent prior to the final settlement process being completed.

Complex Assessment Officers must check partner consent has been provided via one of the following:

• Customer and Partner signatures on Home Equity Access Scheme (HEAS) – variation SA497 form scanned to customer or partner record
• Consent DOC on either customer or partner record in Process Direct or Customer First, or
• Consent task on customer or partner record in Process Direct

Payments made to customers under HEAS, are a loan secured by Australian real estate.

A charge or caveat is lodged by the Commonwealth over the secured property to:

• protect Government outlays, and
• make sure Services Australia is advised of any changes to a HEAS secured property land title

For example, via an impending sale of the real estate used to secure a HEAS loan. If this occurs, the Home Equity Access Scheme National team:

• cancel the HEAS loan as appropriate
• can arrange settlement
• renegotiate the HEAS loan security

If a HEAS customer wants to offer another property as security, see the Resources page for the Substitute Security Tasking request template.

See also, Process steps in Assessing Home Equity Access Scheme (HEAS) applications for documents and valuations details.

If a HEAS customer intends to sell the secured property currently recorded for HEAS loan purposes, the customer must:

• contact the agency before settlement to arrange for renegotiation of the HEAS loan security, or
• repay the outstanding HEAS loan balance upon settlement of the sale

Note: if the customer is partnered, the partner must provide consent prior to the final settlement process being completed.

If a HEAS customer contacts about settling their HEAS loan, the NNEG must be considered.

An NNEG applies when a HEAS customer settles their current HEAS loan. This means they will not need to repay more than the current market value of the secured property. The NNEG will not apply if a customer:

• intentionally increases encumbrances (such as mortgages) on the secured property which limits the Commonwealth’s ability to recover the full amount of the HEAS loan balance
• misrepresents their circumstances while participating in HEAS, or
• commits fraud

When the customer is first granted HEAS, the equity in the secured property offered for the HEAS loan is calculated using information from the HEAS Details (PLS/HEAS) screens

At the settlement of HEAS, if the NNEG is to be applied an ‘adjusted real estate value’ needs to be determined. The adjusted real estate value is the current market value minus any non- HEAS encumbrances or loans.

There is a ministerial determination that sets out how the ‘adjusted real estate value’ is calculated:

• The Commonwealth cannot recover more than the ‘adjusted real estate value’
• If a customer settles their HEAS debt and repays the total amount owing via electronic banking, and it is later found the NNEG applied to their circumstances, a:
• full, or
• partial refund is required

If possible, determine if the NNEG applies before a HEAS customer makes the repayment.

The Resources page contains examples of how to calculate the adjusted real estate value for NNEG.

If a customer, partner (if applicable) or nominee contacts requesting release of the HEAS secured property, they must settle their HEAS loan first.

• If the customer, partner (where applicable) or nominee would like know the current HEAS loan balance details, see Home Equity Access Scheme (HEAS) > Resources page > FAQs
• The HEAS Settlement letter can be issued from Home Equity Access Scheme letters (HEASL) screen in Process Direct, providing projected HEAS settlement payout figures
• See Repayment of Home Equity Access Scheme (HEAS) loans for more details about repayments, and options on how to repay a HEAS loan

Note: If the customer is partnered, the partner must provide consent prior to the final settlement process being completed.

Customers must settle their HEAS loan in full if:

• their deceased partner owned 100% of the secured property, or
• they become a tenant in common with their surviving partner, and they have willed all or part of their share of the HEAS secured property to a third party, or
• a third party or parties request that their share of the secured property be transferred into their name/s

See Home Equity Access Scheme (HEAS) reviews for more details.

The HEAS loan must be repaid from a customer's estate after their or their surviving partner's death. In the case of the death of a single customer, the agency will usually enforce the charge on the secured property and recover the outstanding HEAS loan balance immediately from the estate.

See Initiating recovery of a Home Equity Access Scheme (HEAS) outstanding loan amount for more details.

If a staff member identifies suspected fraud with a HEAS claim or activity, they must report it.

See:

• Report Suspected Fraud and Corruption, and
• Identity fraud