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

Make genuine attempts to contact the customer or partner (if applicable) to discuss the following:

• Settlement request received from legal representative:
  • advising the sale of a HEAS secured property, or
  • requesting repayment with funds obtained from another source, and/or
  • requesting removal of caveat or charge registered by Services Australia
• Confirm date of settlement - when an executor or solicitor has requested to settle or a transmission of title, there may be no date indicated for the request
• If a formal request to settle has not been received. Tell the customer and partner (if applicable) if they both have HEAS loans, they must initiate settlement of their own HEAS loan/s through:
  • their Centrelink online account
  • a signed written statement, or
  • a Home Equity Access Scheme variation form (SA497)
• If contact is with the executor or solicitor of a recoverable deceased estate, they:
  • are not required to request settlement through online services or a SA497
  • must provide the Executor/Administrator Request for information form (SS524). This form asks for a copy of the will. See the Resources page for a link to the form.
• If the customer requests a substitute security, see Table 4 > Step 15 in Change of circumstances - Home Equity Access Scheme (HEAS)
• If the customer is partnered, tell the customer that their partner must also sign the SA497 as consent to settlement of the HEAS loan
• If the customer is in receipt of HEAS payments, tell them the HEAS loan will stop immediately
• Tell the customer and partner (if applicable) they do not need to make early repayments to have the caveat or charge removed (this will avoid double repayments and refunds). The caveat or charge is removed on the date of settlement, in exchange for the HEAS balance due on the settlement date
• Set a timeframe with customer and partner (if applicable) for the formal request to be received, noting the urgency as settlement is within 14 days

HEAS Settlement Immediate Fast Note:

• Hold until the next business day or the agreed timeframe
• Annotate with all attempts to contact customer and partner (if applicable) or executor and discussions held

Move the Legal Provider email from category HEAS Mailbox Immediate Processing into the CAOs name email category.

If the Fast Note contained: 'Physical letter has been uploaded to customer record' there will be no email in the HEAS team mailbox.

For deceased estates

Further contact with an executor may be needed to (but not limited to):

• initiate settlement
• confirm details
• provide Executor Administrator Request for information form (SS524)

If further contact with an executor is:

• needed, contact the executor to discuss, then go to Table 3
• not needed, go to Table 3

For all other settlements

If contact with the customer or partner (if appliable) was:

• successful, go to Step 2
• unsuccessful, contact the legal representative to discuss the settlement request and urgency for customer and partner (if appliable) to initiate settlement request. Go to Step 2

If the customer and partner (if applicable) is still in receipt of fortnightly loan payments, stop the HEAS payments from the entitlement period end date (EPED) for the current HEAS payment period.

In Customer First/Customer Record:

• Go to the Loan Details (PLS) screen
• Do not insert a new date
• Update the cease loan indicator to Y reason CLR
• Key action as C
• Finalise the HEAS assessment
• Go to Step 3

As the settlement is within 21 days, prepare the tasking request.

• Draft a tasking request using the relevant template on the Resources page. Do not email to the Property and Home Equity Access Scheme Legal team until the customer and partner (if applicable) initiate settlement
• Go to Step 4

Check the customer and partner (if applicable) records, for the formal request to settle their HEAS loan after the agreed timeframe.

Has the formal settlement request been provided?

• Yes:
  • document all further actions in the HEAS Settlement Fast Note - select Auto text > use Older Australians > Home Equity Access Scheme > HEAS Settlement, do not finalise it. CAOs must allocate the started work item to themselves through Work Optimiser
  • close the HEAS Settlement Immediate Fast Note
  • upload the Legal Provider email to the customers and partner (if applicable) record
  • delete the email from the HEAS team mailbox
  • complete the settlement process, see Table 3
• No, make genuine attempt to contact the customer to advise the formal settlement request has not been received. If contact is successful, wait for the formal request, then go to Table 3. If contact is not successful:
  • annotate the HEAS Settlement Immediate Fast Note with all attempts to contact
  • hold the HEAS Settlement Immediate Fast Note for the next business day
  • attempt contact each business day until successful and formal settlement initiated

The request to settle a HEAS loan from customers or executor/s legal representative of a deceased customers estate can happen from:

• sale of a HEAS secured property
• repayment from deceased estate
• repayment with funds from another source, or
• HEAS loan already repaid, and
• request removal of caveat or charge

A HEAS loan settlement can be requested through:

• Centrelink online account
• Home Equity Access Scheme variation form (SA497)
• signed, written request confirming the customer and partner (if applicable) would like to withdraw from HEAS and settle their loan
• executor in writing when the customer is deceased and was not partnered or partner is also deceased

The executor of a recoverable deceased estate is:

• not required to request a settlement through online services or a SA497
• required to provide Executor/Administrator Request for information form (SS524).This form asks for a copy of the will. See the Resources page for a link to the form

Note: if the executor of a recoverable deceased estate requests a transmission of title, see Home Equity Access Scheme (HEAS) reviews.

Further contact with an executor may be needed to (but not limited to):

• initiate settlement
• confirm details
• provide Executor Administrator Request for information form (SS524)

For deceased estates

If further contact with an executor is:

• needed, contact the executor to discuss , then go to Step 5
• not needed, go to Step 5

For all other settlements

Contact the customer and partner (if applicable), go to Step 2.

Make genuine attempts to contact the customer, their partner (if applicable) or if the customer is deceased, the estates representative to confirm the settlement request and date of settlement.

• If a formal request to settle has not been provided, tell the customer and partner (if applicable) if they both have HEAS loans, they must initiate settlement of their own HEAS loan/s through:
  • their Centrelink online account
  • a signed written statement, or
  • a Home Equity Access Scheme variation form (SA497)
• If the:
  • request to settle is submitted online, the customer and partner must submit separate requests, including consenting to each other's request
  • customer is partnered, they both must sign the written statement or SA497 as consent to settle the HEAS loan
  • customer is in receipt of HEAS payments, tell them the HEAS loan will stop immediately
  • customer requests a substitute security, see Table 4 > Step 15 in Change of circumstances - Home Equity Access Scheme (HEAS)
• Tell the customer and partner (if applicable):
  • what documents (if required) are to be provided with the formal request. Set a timeframe with the customer and partner (if applicable) for the formal request to be received, noting the urgency if the settlement is within 14 days
  • they do not need to make early repayments to have the caveat or charge removed (this will avoid double repayments and refunds).
    Note: the caveat or charge is removed on the date of settlement, in exchange for the HEAS balance due on the settlement date
• If the HEAS secured property is an assessable real estate asset and has been sold:
  • update the sale price on the Real Estate Details (RE) screen with the sale value
  • tell the customer and partner (if applicable) that they will be sent a HEAS settlement letter with proposed settlement dates and amounts, and they do not need to make early repayments to have the caveat removed (this will avoid double repayments and refunds).
    Note: the caveat is removed on the date of settlement, in exchange for the HEAS loan balance due on the settlement date
• For online requests, check if any further documents are required. For example, sale contract if the No Negative Equity Guarantee (NNEG) applies, and/or loan documents

Member of a Couple (MoC)

If the customer is a Member of a Couple (MoC), check if the partner has also lodged a HEAS Settlement request.

If both MoC have requested settlement, a separate work item is created for each person and bundled together so that both work items are automatically assigned. If the work items have not automatically bundled:

• allocate the partner's Work Item through Work Optimiser, and
• action both HEAS settlement requests at the same time

If contact was:

Successful, and the formal request to initiate settlement has:

• been received with consent from both customer and partner (if applicable):
  • Create a Fast Note - select Auto text > use Older Australians > Home Equity Access Scheme > HEAS Settlement, do not finalise it. CAOs must allocate the started work item to themselves through Work Optimiser
    Note: if the settlement is part of a deceased HEAS loan recovery and a HEAS deceased loan recovery Fast Note is created, use this Fast Note during the settlement process
  • Annotate the HEAS Settlement Fast Note or HEAS deceased loan recovery Fast Note when appropriate during the settlement process
  • Hold the HEAS Settlement Fast Note for 4 weeks
  • Continue to assess the settlement, go to Step 5
• not been received or consent is required, go to Step 3

Unsuccessful, go to Step 3

• Send a manual letter, see Creating a Q999 or Q888 letter
• Use Q999 to tell the customer and partner (if appliable) to formally request settlement and enclose a SA497
• Create a Fast Note - select Auto text > use Older Australians > Home Equity Access Scheme > HEAS Settlement, do not finalise it. CAOs must allocate the started work item to themselves through Work Optimiser
• Include in the HEAS Settlement Fast Note information on Q999 request
  Note: annotate the HEAS Settlement Fast Note when appropriate during the settlement process
• Hold the HEAS Settlement Fast Note for 4 weeks

Procedure ends here until:

• the customer provides consent and/or initiates the settlement, or
• expiry of the time allowed in Q999

Did the customer provide consent and/or initiate the settlement?

• Yes, go to Step 5
• No, go to Step 4

• In Customer First/Customer record
  • Go to the Loan Details (PLS) screen
  • Do not insert a new date
  • Update the cease loan indicator to Y reason CLR
  • Key action as C
  • Finalise the HEAS assessment
• Annotate the HEAS Settlement Fast Note with details of why the HEAS loan has been stopped
• Hold the HEAS Settlement Fast Note for a further 2 weeks
• After the 2 weeks has been reached, if the customer initiates settlement, continue the settlement process. Go to Step 6
• After the 2 weeks has been reached, if the customer fails to provide documentation to initiate or consent to the settlement, make genuine attempts to contact the customer and partner (if applicable). If contact is:
  • unsuccessful, close the HEAS Settlement Fast Note. Procedure ends here
  • successful, tell the customer and partner (if applicable) they need to initiate settlement or consent for the settlement process to proceed. Once settlement is initiated or consent for the settlement process to proceed has been provided. Go to Step 6

If the customer is still in receipt of fortnightly loan payments, stop HEAS from the entitlement period end date (EPED) for the previous HEAS payment period.

For customers who have submitted:

• an online request, in Process Direct:
  • Go to the Loan Details (HEAS) screen
  • Do not insert a new date
  • Update the cease loan indicator to Y reason CLR
  • Finish the online request
• a SA497 or a signed, written request in Customer First/Customer Record:
  • Go to the Loan Details (PLS) screen
  • Do not insert a new date
  • Update the cease loan indicator to Y reason CLR
  • Key action as C
  • Finalise the HEAS assessment

Only one Fast Note is required to be held during the settlement process.

Complete the online settlement work item or digital scan work item.

• If the customer has intentionally increased encumbrances, misrepresented their circumstances or committed fraud, even if the adjusted real estate value is lower than the HEAS balance owing at the time of settlement:
  • the NNEG will not apply, and
  • the full amount of the debt can be recovered
• If the NNEG applies and the adjusted real estate value is less than the HEAS loan balance owing at the time of settlement, then anything owing above the adjusted real estate value cannot be recovered
• If the adjusted real estate value is more than the HEAS balance owing, the NNEG will not reduce the amount payable and the full amount of the debt can be recovered

Calculate the 'adjusted real estate value'.

The adjusted real estate value is the current market value minus any non- HEAS encumbrances or loans and can be determined as below.

See the Resources page for examples of adjusted value calculation for No Negative Equity Guarantee.

Market Value

• If the settlement is following the sale of the HEAS secured property, the market value will generally be the sale price
  • Determine if the sale price is reasonable. If reasonable, the sale price can be accepted
  • If the No Negative Equity Guarantee (NNEG) is to apply or could potentially apply, request a copy of the contract of sale to support any decision made
• If the proposed settlement is by way of funds not from the sale of the HEAS secured property, the market value can be the:
  • market value from the last valuation of the secured property held on Real Estate and Business Summary (REBS) if it was obtained within the last 3 months, or
  • customer’s estimated value, if determined to be reasonable
• If either party does not agree to the value being the last recorded value, then an accredited valuer will determine the market value of the HEAS secured property through an on-site valuation
  • Follow the HEAS appeal and review guidelines. See Table 5 on the Resources page in Home Equity Access Scheme (HEAS) for valid codes to include in the Internal Review/Explanation Script
  • Where a valuation has been appealed, alert the Property and Home Equity Access Scheme Legal team to place the tasking request (see Step 9) on hold until the review is finalised
  • Request a new onsite valuation of the HEAS secured property
• For HEAS secured properties owned by a trust or company
  • Determine the value of the ‘specified property’ the trust or company guaranteed for the HEAS loan

Encumbrances

• For any pre-existing encumbrances registered against the HEAS secured property when HEAS was granted
  • get the most recent loan statements available
• Check to see if there were any additional borrowings on pre-existing loans and request details of any loan variation contracts, if available
• Do not include any deductions from the HEAS debt
• If there is any indication of any additional borrowings taken out against the HEAS secured property:
  • Request a title search to check for additional encumbrances or charges that may have been raised
  • Request a copy of any related loan contracts and loan statements

When the No Negative Equity Guarantee (NNEG) decision is determined, update the HEAS details.

Adjusted Real Estate Value

The method of determine the value of the real assets (including a Reverse Mortgage) for NNEG is specified by a Ministerial Determination.

After determining the adjusted value, key the amount in the Adjusted Real Estate Value field on the Pension Loan Scheme (PLS) screen in Customer First /Customer Record.

When the determination of the value of real assets for the NNEG where HEAS loan is:

• not secured by real estate owned by a private trust or private company, the value of real assets is:
  • the market value of all secured properties used for the HEAS loan, less
  • all encumbrances and loans against the secured properties used for the HEAS loan. Do not include the HEAS loan balance in the encumbrances and loans at this point
• secured by property owned by a private trust or private company:
  • the value is the total amount specified by the private trust or private company to be used as security for the HEAS loan
  • this amount is not apportioned by the customer's percentage of ownership in the property or properties

NNEG Ineligible Reason

Where NNEG does not apply as the customer:

• has intentionally increased encumbrances, and the full amount of the HEAS loan is to be recovered, key LRL (ability to recovery loan limited) in the NNEG Ineligible Reason field
• misrepresented their circumstances, or committed fraud and the full amount of the HEAS balance is to be recovered, key MCF (customer misrepresented circumstances) in the NNEG Ineligible Reason field

Include full details of the adjusted value calculation and NNEG assessment on the HEAS Settlement DOC including the:

• adjusted Real Estate Value - if applicable, or
• NNEG Ineligible Reason = LRL or MCF and how this decision was made, and
• evidence or documentation used to make the decision. Documents must be scanned to the customers record, see Attaching electronic documents to a Centrelink customer's record

Anything owing above the adjusted real estate value cannot be recovered if the:

• NNEG applies, and
• adjusted real estate value is less than the HEAS loan balance owing at the time of settlement

If the NNEG does not apply:

• confirm the customer's relationship status. This is to determine if a single customer has a deceased partner, that may also have a recoverable HEAS loan
• confirm if the caveat/charge registration costs were added to the HEAS loan and are paid. For example, if a HEAS loan was recently granted the registration costs may not have been added to the HEAS balance. Get the caveat/charge registration costs details to form part of the settlement sum
• use the HEAS Future Settlement calculator on the Resources page
• go to the Loan Details (PLS/HEAS) screen, enter the last Entitlement Period End Date (EPED) in the Pension Payday field
• if there has been a HEAS repayment since the last EPED, enter the HEAS repayment amount as a negative figure next to the next Pension Payday field on the Future Settlement Calculation spreadsheet
• the HEAS amount required to settle is the amount owing at the EPED before the date of settlement
• Upload or scan the HEAS Future Settlement calculation spreadsheet to the customers and partner (if applicable) record

Update the Settlement Fast Note with:

• the total settlement amount owing and if partnered, the combined total settlement amount owing
• a breakdown of the total settlement amount owing and if partnered, a breakdown of both settlement amounts
• the date the settlement amount will be accepted to being the day before the next Entitlement Period End date (EPED), and repeat the same for the settlement amount owing for the following EPED

Issue a HEAS settlement letter to the customer with the HEAS loan payout figure for the next 3 consecutive fortnights.

To issue a HEAS settlement letter:

• Go to Process Direct
• Go to the Home Equity Access Scheme letters (HEASL) screen
• Complete all relevant fields

The settlement letter must be completed using the date of settlement provided by the customer. The date of settlement is the reference point to determine the 3 consecutive fortnight loan amounts and associated dates.

Issue a reference number to the customer and BPAY details for a direct payment and request to remove the caveat/charge from the HEAS secured property. (The Agency covers transaction costs.)

The HEAS settlement letter:

• allows the HEAS settlement projection amounts and dates of acceptance into the HEAS settlement letter to be manually added
• allows manual input of the reason why the No Negative Equity Guarantee (NNEG) may not apply, and
• provides HEAS electronic repayment options such as BPAY and AusPost Billpay

Once a settlement date and a HEAS settlement amount has been determined, send a relevant tasking request using the template on the Resources page to the Property and Home Equity Access Scheme Legal team.

Email the tasking request template:

• Include details of the proposed HEAS settlement date
• Attach the scanned title search obtained by the Legal Provider at grant.
  Note: the title will be on the customer's record. See the DOA Fast Note for the date the costs were added to the loan and the document ID number. Search in document tools at this date for title UNS007 - Legal
• Determine is the HEAS settlement is urgent. If urgent, and the HEAS settlement is due:
  • between 7 and 28 days, the tasking email must be labelled as URGENT
  • within 7 days, the tasking email must be labelled as URGENT- DUE WITHIN 7 DAYS and include a member of the Property and HEAS Legal team
• Include the HEAS team mailbox in the Cc field

The Property and HEAS Legal Team will instruct contracted solicitors to withdraw the caveat or charge in exchange for repayment of the outstanding HEAS loan balance.

• Once uploaded to the record, the email from Property and HEAS Legal team, must be deleted from the HEAS team mailbox
• Annotate the HEAS Settlement Fast Note with the individual components on HEAS/PLS screen:
  • principal
  • interest, and
  • costs (if any)

Coding of the Adjusted Real Estate Value is required for all HEAS settlements regardless of whether the No Negative Equity Guarantee (NNEG) applies or does not apply, and is done twice:

• first when the HEAS settlement letter is sent, and
• again, after settlement funds have been received through BPAY, AusPost Billpay or in person by cheque or money order and banked

The following steps make sure the most recent HEAS balance is used in the calculation of the correct NNEG amount for a HEAS settlement.

Update the Adjusted Real Estate Value as follows:

• Remove the earlier coded Adjusted Real Estate Value, accept the changes, and finalise the activity
• Recode the Adjusted Real Estate Value, accept the changes, and finalise the activity

For HEAS settlements where the NNEG does not apply:

• Go to Repayment of Home Equity Access Scheme (HEAS) loans, and follow the process for general receipting and coding

For HEAS settlements where the NNEG does apply, in Customer First/Customer Record:

• Use the last date on the Loan Details (PLS) screen
• Code the HEAS settlement costs to Costs, and accept the change. Do not make any other adjustments
• Allocation of HEAS settlement funds will be in order of:
  • Costs
  • Interest, and
  • Principal
• Code the receipts and accept the change
• Zero any HEAS loan balance amount left owing and accept the change
• Inhibit the advice by keying INH LTTR in the actions box. This will prepopulate Inhibit Letter in the letter action box
• Finalise the HEAS assessment

After all monies have been receipted and coded, finalise the HEAS settlement or deceased loan recovery Fast Note on the customer’s record.

• Update details of the receipts in the HEAS Settlement Fast Note with HEAS Settlement - Banking of settlement cheque or HEAS Deceased loan recovery - Banking of settlement cheque annotation. See, Table 2 on the Resources page in Change of circumstances - Home Equity Access Scheme (HEAS)
• Remove:
  • any details about HEAS from the property description on REBS
  • the property ID from the PLS/HEAS screen
• If the HEAS secured property is an assessable asset and settlement was:
  • not by sale of the property, remove the HEAS loan amount from the Mortgage/Loans field
  • by sale of the secured property, do not remove the HEAS loan amount from the Mortgage/Loans field. Create an open work item using Fast Note - select Auto Text > use Generic > Update> Real estate action required to advise the property has sold (include the REBS property ID number, address and date of sale if known), and request they follow up the sale of real estate
• Send a HEAS Settlement statement to the customer from Home Equity Access Scheme letters (HEASL) in Process Direct

The Settlement statement must be sent once payment has been finalised and advises the customer that the HEAS loan has been reduced to zero.

Annotate the HEAS DOA DOC for customer and partner (if applicable) with HEAS DOA Settlement annotation. See, Table 2 on the Resources page in Change of circumstances - Home Equity Access Scheme (HEAS).

Tasking completion statements for settlements are emailed from the Legal Provider after the settlement process has been finalised.

The statement provides details of the legal costs associated with the settlement request.

Upon receipt of the tasking completion statement:

• upload or scan the Tasking Completion Statement to the customer and partner (if applicable) record
  Note: if the email contains the new property title in the registered names who are not the customer and/or partner, do not upload to the customers record
• delete the email from HEAS team mailbox