The Government Scheme Letting Australian Retirees Tap Into $3 Trillion of Housing Wealth

Why Australia’s $3 Trillion Housing Wealth Problem Matters

Australia’s retirees are sitting on an extraordinary amount of wealth, most of it locked away where they can’t easily reach it.

According to research from the University of New South Wales, Australian homeowners aged 65 and over collectively hold more than $3 trillion in housing equity. For many retirees, this represents the vast majority of their total net worth. Their superannuation balances may be modest, their Age Pension covers only basic expenses, and yet they own outright, or near outright, one of the most valuable assets in the country.

This creates an uncomfortable paradox: asset-rich but cash-poor. A retiree in suburban Melbourne might own a home worth $1.2 million and struggle to afford dental care, home maintenance, or a modest holiday. Their wealth is in the walls, and conventional wisdom has always said there’s no easy way to access it without selling up and downsizing — an emotionally and financially complex decision that many retirees are reluctant to make.

Enter the Home Equity Access Scheme (HEAS), a government loan program that has been operating quietly for years but is generating renewed attention in 2026 as more Australians grapple with the compounding pressures of inflation, rising living costs, and superannuation balances that many financial planners consider inadequate for a comfortable retirement.

Research published this week by UNSW and reported widely in The Conversation, ABC News, and Firstlinks points out that HEAS is “little known and underused” — a scheme that could benefit hundreds of thousands of Australians who are either unaware it exists or uncertain how it works.

This guide explains the scheme in detail, helps you understand whether it might be suitable for your situation, and highlights the key questions you should ask a financial adviser before applying.

What Is the Home Equity Access Scheme?

The Home Equity Access Scheme (HEAS) is a federal government program administered by Services Australia (Centrelink). It allows eligible older Australians to access a loan secured against real estate they own in Australia.

Unlike a standard bank loan, you do not need to make regular repayments. Interest compounds on the outstanding balance, and the loan (plus accrued interest) is repaid when you:

• Sell your home
• Move into permanent aged care
• Pass away (from your estate)

Voluntary repayments can be made at any time, which can help manage the compounding interest. There is no penalty for early repayment.

The scheme was previously known as the Pension Loans Scheme (PLS) before being renamed and expanded in July 2022. The changes made in 2022 were significant: they removed the requirement to be receiving the Age Pension to qualify, introduced lump sum advance payments, and increased the maximum fortnightly loan amount to 150% of the maximum Age Pension rate.

Key Facts at a Glance

Who Is Eligible for HEAS?

To be eligible for the Home Equity Access Scheme, you must meet the following criteria:

Age: You must be of Age Pension age — currently 67 years old for both men and women.

Property ownership: You must own real estate in Australia. This can be your principal home or investment property. The property must be in Australia and registered with the relevant state or territory land title authority. You do not need to own the property outright; equity in the property is sufficient.

Residency: You must be an Australian resident. There are specific rules for people who spend extended periods overseas.

Age Pension: You do not need to be receiving the Age Pension to access HEAS. This was a major change made in July 2022 and opens the scheme to a much wider group of self-funded retirees.

Maximum loan rule: The total outstanding loan balance cannot exceed a set loan-to-value ratio. Services Australia will conduct a property valuation (at no cost to you) to determine the maximum available loan.

Who Might HEAS Help Most?

The scheme is particularly relevant for:

• Part-pensioners who want to supplement their pension income without selling assets
• Self-funded retirees who own property but have limited super or investment income
• Retirees with large housing equity but modest super — a common situation for Australians who bought property decades ago before compulsory super was widespread
• People who want to delay downsizing but need additional cash flow in the interim
• Those facing unexpected large expenses (medical, dental, home repairs, travel) who don’t want to liquidate investments

How HEAS Payments Work

You can receive HEAS payments as a fortnightly income supplement, lump sum advances, or a combination of both.

Fortnightly Payments

The maximum fortnightly HEAS payment is calculated as 150% of the maximum Age Pension rate, less any Age Pension you are already receiving.

Example (single, April 2026 rates):

• Maximum Age Pension (single): $1,149.00 per fortnight
• Maximum HEAS fortnightly payment: $1,723.50 (150% of max pension)
• If you receive full Age Pension of $1,149.00, you can access up to $574.50 per fortnight via HEAS
• If you receive no Age Pension (self-funded retiree), you can access up to $1,723.50 per fortnight

Lump Sum Advances

Since July 2022, HEAS allows up to two lump sum advances per year. Each advance can be up to the annual equivalent of the maximum fortnightly payment amount. This gives retirees flexibility to cover large one-off expenses without committing to ongoing payments.

Couple Scenarios

For couples, each partner applies separately, and each has their own entitlement. A couple can potentially access:

• Up to $1,299.15 per fortnight each ($2,598.30 combined) if neither is receiving the Age Pension
• Their combined entitlement reduces proportionally if they are receiving partial or full Age Pension payments

The Interest Rate Advantage

The 3.95% interest rate on HEAS is one of its most compelling features.

Compare this to commercial reverse mortgages in Australia, which typically charge 7-9% per annum. At current market rates from major lenders like Heartland and Bluestone, reverse mortgage rates sit around 8.5-9.0%.

The difference is enormous when you factor in compound interest over time.

Example — $200,000 loan over 10 years:

This is a simplified comparison (doesn’t account for changing balances), but it illustrates the significant cost advantage of HEAS over commercial alternatives.

The HEAS rate is set by the Australian Government and can be changed through regulation. The fact that it has remained at 3.95% since January 2022 — through a period when the RBA raised the cash rate from 0.10% to 4.35% and then to 4.10% — suggests a deliberate policy decision to keep the scheme affordable for retirees.

The No-Negative-Equity Guarantee: What It Means

Both HEAS and commercial reverse mortgages in Australia include a no-negative-equity guarantee. This is a crucial consumer protection.

What it means in practice: regardless of how much interest accrues on your HEAS loan, the total amount you (or your estate) ever need to repay can never exceed the market value of your property at the time of sale.

This protection was introduced following concerns that early reverse mortgage products in the 1990s and 2000s allowed interest to compound to the point where the loan exceeded the property value, leaving borrowers (or their estates) in debt after the property was sold.

Under the current framework, if your property declines dramatically in value and your outstanding HEAS balance exceeds the sale price, the government absorbs the shortfall. You cannot be pursued for the difference.

Impact on Age Pension Entitlements

This is one of the most frequently misunderstood aspects of HEAS, and getting it wrong can have significant financial consequences.

The general rule: HEAS payments used as a regular income stream to pay for living expenses are not assessed as income for Age Pension purposes. They are a loan, not income.

However, the situation becomes more complex with lump sum advances:

• If you take a lump sum advance and spend it on non-assessable items (medical, dental, renovations, holidays), there is generally no impact on your Age Pension.
• If you take a lump sum advance and invest it in assessable assets (term deposits, shares, managed funds), those assets will be included in your assets test and income test, potentially reducing your Age Pension entitlement.

This is an area where specialist financial advice is critical. The interaction between HEAS, the assets test, the income test, and Age Pension calculations is genuinely complex. A mistake can result in a reduction in pension entitlements that far outweighs the benefit of the HEAS payment.

Why HEAS Is Underused

Despite the attractive interest rate and relatively straightforward eligibility criteria, uptake of HEAS has been low. Services Australia data shows only around 10,000-15,000 Australians are currently using the scheme — a fraction of the hundreds of thousands who would potentially qualify.

Reasons for low uptake include:

Poor awareness: Many financial advisers are not familiar with HEAS, and Centrelink does not proactively market the scheme to eligible retirees. Research by UNSW found that even among financial planning professionals, awareness of the scheme is limited.

Reluctance to borrow against the family home: Many older Australians have strong cultural or personal beliefs about property ownership and debt. The idea of a loan secured against the home — even at a low rate — creates discomfort for many retirees.

Desire to leave the home to children: A HEAS loan reduces the equity available to pass on as an inheritance. For retirees who prioritise leaving their home to their children, this is a significant consideration.

Complexity of the means test interactions: Retirees who have received confusing or incorrect advice about the pension impacts of HEAS have sometimes been deterred by misunderstandings about how the scheme affects their entitlements.

Preference for alternative strategies: Many retirees prefer to downsize, access superannuation (for those who haven’t yet), or take out a home equity line of credit with a bank.

HEAS vs. Downsizing: Which Makes Sense?

For many retirees, the alternative to HEAS is downsizing: selling the family home, purchasing a smaller property, and using the freed-up capital to supplement retirement income.

The Downsizer Super Contribution (available to those aged 55+) allows up to $300,000 per person ($600,000 per couple) of the proceeds from selling a family home to be contributed to superannuation without counting toward the annual contribution caps. This can be highly tax-effective.

However, downsizing has costs that are often underestimated:

For a retiree selling a $1.2 million home and buying a $900,000 apartment, the transaction costs alone can easily reach $60,000-$80,000. If the goal is simply to generate $500-$1,000 per fortnight in additional income, HEAS may achieve this at a much lower cost — particularly if the plan is to remain in the family home for only a further 5-10 years.

The decision is highly individual and depends on health, family circumstances, property market conditions, and personal preferences. A financial adviser with experience in retirement income planning can model both scenarios with specific numbers.

How to Apply for HEAS

Applying for HEAS is done through Services Australia (Centrelink). The process involves:

1. Contact Services Australia — by phone (Centrelink financial information line: 132 300) or visit a service centre.
2. Complete the application form — SA310 (Home Equity Access Scheme application).
3. Property valuation — Services Australia arranges a property valuation at no cost to you. This determines the maximum loan available.
4. Loan agreement — A legal charge is placed over your property as security for the loan.
5. Payment commencement — Payments begin once the application is approved and the charge is registered.

The entire process typically takes 4-8 weeks, depending on property valuation timelines in your area.

It is strongly recommended to obtain independent financial and legal advice before applying. A financial adviser can model the impact on your pension entitlements and retirement income, while a solicitor can review the loan documents and explain your legal obligations.

Real-World Example: How HEAS Could Work

Margaret, 72, retired teacher, Melbourne

Margaret owns her home outright, valued at $950,000. She receives a partial Age Pension of $600 per fortnight. Her superannuation balance is $280,000, generating an allocated pension of around $1,100 per fortnight. Combined income: approximately $1,700 per fortnight.

Margaret’s expenses run closer to $2,200 per fortnight after accounting for health costs, rates and utilities, a gym membership, and occasional visits to see her grandchildren interstate. The shortfall of $500 per fortnight is a constant source of stress.

Under HEAS, Margaret could potentially access up to $574.50 per fortnight (the difference between her current pension and 150% of the maximum pension). If she takes this amount each fortnight for 10 years, her outstanding HEAS debt would grow to approximately $165,000 (including compounding interest at 3.95%).

If Margaret’s property appreciates to $1.3 million by then (a reasonable assumption at a conservative 3% annual growth), her estate would have approximately $1.135 million in net housing equity after repaying the HEAS loan — a meaningful inheritance for her children.

Importantly, if her property declined in value and her HEAS debt exceeded the property value, the no-negative-equity guarantee means her estate would not be liable for any shortfall.

Is HEAS Right for You?

HEAS is not the right solution for everyone, but it deserves serious consideration if:

• You are asset-rich but cash-poor in retirement
• You want to stay in your home but need more income
• You prefer a government-backed, low-interest solution over commercial alternatives
• You have thought about your estate planning and are comfortable with a reducing inheritance
• Your Age Pension situation is relatively simple (or you have a financial adviser helping you model the impacts)

It is likely not the right solution if:

• You plan to sell and downsize in the next 1-2 years (the transaction costs and HEAS establishment process make it impractical)
• You have a very large outstanding mortgage (limiting available equity)
• You are concerned about complex means test interactions and do not have access to professional financial advice
• You intend to leave your home to specific beneficiaries and want to preserve maximum equity

Get Expert Retirement Income Advice

The intersection of superannuation drawdowns, Age Pension entitlements, property decisions, and estate planning is one of the most complex areas of personal finance in Australia. A strategy that works brilliantly for one retiree can reduce another’s pension entitlements or create unintended tax consequences.

If you are exploring HEAS, or any strategy to maximise your retirement income, speaking with a qualified financial adviser who specialises in retirement planning is essential.

WealthWorks connects Australians with verified financial advisers, SMSF specialists, accountants, and estate planning professionals across every state and territory.

Find a retirement planning specialist near you →