Explanatory Statement
Issued by the authority of the Minister for Social Services
Social Security Act 1991
Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026
Purpose
The Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026 (the Amendment Determination) makes minor technical and consequential amendments to the:
- Social Security (Pension Loans Scheme – Age Component Amount) Determination 2019 (the Age Component Amount Determination); and
- Social Security (Pension Loans Scheme – Rate of Simple Interest) Determination 2018 (the Simple Interest Determination).
The amendments to each instrument give effect to the renaming of the pension loans scheme in primary legislation, where the scheme is now referred to in the Social Security Act 1991 (Social Security Act) as the home equity access scheme. No substantive aspects of the scheme are affected by the Amendment Determination.
Background
Home equity access scheme
The home equity access scheme allows eligible Australian residents of age pension age to supplement their retirement incomes through an Australian Government loan, secured by a charge against the person’s real property in Australia. The loan becomes a debt payable to the Commonwealth and accrues interest, and the total amount a person can borrow (the maximum loan amount) is restricted based on the person’s age and the equity in their real assets. The debt is usually recovered from the person once the property is sold or, if the person dies, from the person's estate (see the explanatory memorandum to the Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018).
On 1 January 2022, as a result of market research conducted under the 2021-22 Budget measure Increasing the Flexibility of the Pension Loans Scheme, the pension loans scheme was renamed in policy to the home equity access scheme. The renaming of the scheme reflects that participation is not limited only to persons who receive a pension.
Division 4 of Part 3.12 of the Social Security Act provides for the home equity access scheme as administered by the Department of Social Services. Similarly, Subdivision E of Division 11 to Part IIIB of the Veterans’ Entitlements Act 1986 (Veterans’ Entitlements Act) sets out the legislative framework for participation in the scheme under that Act, as administered by the Department of Veterans’ Affairs.
Age Component Amount Determination and Simple Interest Determination
The Age Component Amount Determination determines a person’s age component amount for the purposes of subsection 1135A(3) of the Social Security Act. This amount is used to determine a person’s maximum loan amount under the home equity access scheme. The maximum loan amount effectively sets a cap on how much a person can borrow under the scheme. When a debt owed by a person exceeds their maximum loan amount, the person ceases participation in the scheme (see section 1141 of the Social Security Act).
The Simple Interest Determination is made under subsection 1135(4) of the Social Security Act. The purpose of the Simple Interest Determination is to set the rate of simple interest that is payable on a loan under the previous pension loans scheme. The Simple Interest Determination sets the interest rate at 7 per cent for this purpose. A person could have qualified for a loan under the previous pension loans scheme until 10 July 1996.
The Age Component Amount Determination also impacts participants accessing the scheme under the Veterans’ Entitlements Act, due to the operation of subsection 52ZCA(1) of that Act. There is no equivalent Simple Interest Determination made under the Veterans’ Entitlements Act.
Amendment Determination
Part 2 of Schedule 5 to the Regulatory Reform Omnibus Act 2025, which commenced on 5 December 2025, prescribed a series of amendments to the Social Security Act and the Veterans’ Entitlements Act, to formally rename the pension loans scheme as the home equity access scheme in law.
The Amendment Determination gives effect to the principal amendments by amending two Ministerial instruments made under subsections 1135(4) and 1135A(3) of the Social Security Act. The Amendment Determination does not provide any substantive amendments to the legislative regime governing the operation of the home equity access scheme. Rather, it provides technical and consequential amendments to rename the scheme in two legislative instruments, consistent with the changes made to primary legislation. In addition to ensuring consistency with primary legislation, the amendments will make it easier for prospective and current participants in the home equity access scheme to locate information about the scheme, navigate the relevant legislative regime, and interact with the Australian Government regarding their participation.
The Social Security (Home Equity Access Scheme – Rate of Compound Interest) Determination 2026, also made by the Minister for Social Services, incorporates similar changes to rename the scheme. Similar amendments to the Social Security (Pension Loans Scheme – Market Value) Determination 2022, as made by the Secretary of the Department of Social Services, are also provided by the Social Security (Pension Loans Scheme – Market Value) Amendment (Renaming Scheme) Determination 2026.
Commencement
The Amendment Determination commences on the day after it is registered on the Federal Register of Legislation.
Authority
The Amendment Determination is made under subsections 1135(4) and 1135A(3) of the Social Security Act. Subsections 1135(4) and 1135A(3) of the Social Security Act provide that the Amendment Determination is a legislative instrument.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. In making the Amendment Determination, the Minister is relying on this subsection in conjunction with the instrument-making powers in subsections 1135(4) and 1135A(3) of the Social Security Act.
The Amendment Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Consultation
Services Australia and the Department of Veterans’ Affairs were consulted on the text of the Amendment Determination. These agencies supported the Amendment Determination.
It was not necessary to consult with home equity access scheme participants. This is because the amendments made by the Amendment Determination are purely technical and consequential in nature.
Availability of independent review
Decisions made under the social security law in relation to the home equity access scheme, including in relation to the amount of a participant’s loan debt and the interest rate applicable to the debt, are generally subject to internal and external merits review under Parts 4 and 4A of the Social Security (Administration) Act 1999. Such decisions are not made or affected by the Amendment Determination.
Explanation of the provisions
Details of the Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026
Section 1 – Name
Section 1 states how the instrument is to be cited, that is, as the Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026.
Section 2 – Commencement
Section 2 sets out a table providing for the commencement of the Amendment Determination on the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
Section 3 provides that the Amendment Determination is made under subsections 1135(4) and 1135A(3) of the Social Security Act.
Section 4 – Schedules
Section 4 provides that each instrument that is specified in a Schedule to the Amendment Determination is amended as set out in the applicable items in that Schedule, and any other item in a Schedule to the Amendment Determination has effect according to its terms.
Schedule 1 to the Amendment Determination sets out the amendments to the Age Component Amount Determination and the Simple Interest Determination.
Schedule 1 – Amendments
Age Component Amount Determination
Item 1 amends section 1 of the Age Component Amount Determination, substituting the reference to “Pension Loans Scheme” with “Home Equity Access Scheme”.
Simple Interest Determination
Item 2 amends section 1 of the Simple Interest Determination, substituting the reference to “Pension Loans Scheme” with “Home Equity Access Scheme”.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security Act 1991
Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026
The Social Security Legislation Amendment (Renaming Pension Loans Scheme) Determination 2026 (the Amendment Determination) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
The Amendment Determination makes minor technical and consequential amendments to the:
- Social Security (Pension Loans Scheme – Age Component Amount) Determination 2019 (the Age Component Amount Determination); and
- Social Security (Pension Loans Scheme – Rate of Simple Interest) Determination 2018 (the Simple Interest Determination).
The amendments to each instrument give effect to the renaming of the pension loans scheme in primary legislation, where the scheme is now referred to as the home equity access scheme. The amendments are technical and consequential in nature. No substantive aspects of the scheme are affected by the Amendment Determination. The renaming of the scheme reflects that participation is not limited only to persons who receive a pension.
Human rights implications
The Amendment Determination engages the following human rights under the International Covenant on Economic, Social and Cultural Rights:
- the right to social security (Article 9); and
- the right to an adequate standard of living (Article 11).
The home equity access scheme allows eligible Australians to improve their living standards in retirement by taking out a loan from the Australian Government, secured against the person’s real estate assets. This supports the right to social security and the right to an adequate standard of living by enabling older Australians, who are age pension age or older, to use the social security system to access financial support through the equity in their real estate assets.
The Amendment Determination does not provide any substantive amendments to the legislative regime governing the operation of the home equity access scheme. Rather, it provides technical and consequential amendments to enhance the administration of the scheme. The amendments will make it easier for prospective and current participants in the home equity access scheme to locate information about the scheme, navigate the relevant legislative regime, and interact with the Australian Government regarding their participation in the scheme.
Conclusion
The Amendment Determination is compatible with human rights as it promotes and supports the right to social security and the right to an adequate standard of living.
The Hon Tanya Plibersek MP, Minister for Social Services