Explanatory Statement
Issued by the authority of the Secretary of the Department of Social Services
Social Security Act 1991
Social Security (Pension Loans Scheme – Market Value) Amendment (Renaming Scheme) Determination 2026
Purpose
The Social Security (Pension Loans Scheme – Market Value) Amendment (Renaming Scheme) Determination 2026 (the Amendment Determination) makes a minor technical and consequential amendment to the Social Security (Pension Loans Scheme—Market Value) Determination 2022 (the Market Value Determination).
The amendment to the Market Value Determination gives effect to the renaming of the pension loans scheme to the home equity access scheme in primary legislation. No substantive aspects of the scheme are affected by the Amendment Determination.
Background
The home equity access scheme, formerly referred to as the pension loans scheme, allows eligible older Australians of age pension age to supplement their retirement income through an Australian Government loan. The debt is secured by a charge against the person’s nominated real property in Australia, and the loan amount is restricted based on the equity a participant has in the securing property. 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 1991 (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.
As a result of the same Budget measure, a no negative equity guarantee was introduced on 1 July 2022 in relation to the home equity access scheme, under section 1144AA of the Social Security Act and section 52ZMA of the Veterans’ Entitlements Act. The no negative equity guarantee limits the amount of the debt repayable to the Commonwealth by the participant to no more than the adjusted value of the property used to secure their loan.
The Market Value Determination supports the administration of the no negative equity guarantee. It sets out the methods for determining the market value, and adjustments to be made to the market value, of real property or real assets securing a debt to the Commonwealth under the home equity access scheme.
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 the Market Value Determination, made under subsection 1144AA(6) of the Social Security Act. The Amendment Determination does not make any substantive amendments to the legislative regime governing the operation of the home equity access scheme. Rather, it provides a technical and consequential amendment to enhance the administration of the scheme by ensuring consistent naming in primary and subordinate legislation. The amendment 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 Government regarding their participation.
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 subsection 1144AA(6) of the Social Security Act. Subsection 1144AA(6) of the Social Security Act provides 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 Secretary is relying on this subsection in conjunction with the instrument-making power in subsection 1144AA(6) 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
The Department of Social Services consulted with Services Australia, the Department of Veterans’ Affairs and the Department of Health, Disability and Ageing on the intention to make the Amendment Determination. These agencies supported the Amendment Determination.
It was not necessary to consult with home equity access scheme participants because the amendment made by the Amendment Determination is 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 market value or adjusted value of a participant’s real assets, 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 (Pension Loans Scheme – Market Value) Amendment (Renaming Scheme) Determination 2026
Section 1 – Name
Section 1 states how the instrument is to be cited, that is, as the Social Security (Pension Loans Scheme – Market Value) Amendment (Renaming 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 subsection 1144AA(6) 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 amendment to the Social Security (Pension Loans Scheme—Market Value) Determination 2022 (the Market Value Determination).
Schedule 1 – Amendments
Market Value Determination
Item 1 amends section 1 of the Market Value 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 (Pension Loans Scheme – Market Value) Amendment (Renaming Scheme) Determination 2026
The Social Security (Pension Loans Scheme – Market Value) Amendment (Renaming 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 a minor technical and consequential amendment to the Social Security (Pension Loans Scheme—Market Value) Determination 2022 (the Market Value Determination).
The amendment to the Market Value Determination gives effect to the renaming of the pension loans scheme in primary legislation, where the scheme is now referred to in statute as the home equity access scheme. 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 supports the right to social security and the right to an adequate standard of living by enabling eligible older Australians to draw down on the equity in their real estate assets through a safe and secure, government-backed loan.
Through the scheme, eligible older Australians can improve their living standards in retirement by taking fortnightly loan payments from the Australian Government. A participant can borrow up to 150 per cent of the maximum rate of the age pension, minus any pension payment they already receive. The loan attracts compound interest, and the debt is secured by a charge against the person’s nominated real property in Australia. The scheme includes safeguards that prevent excessive debt accumulation by limiting the amount a person can borrow over their lifetime, based on their age and the equity they have in the securing property. A no negative equity guarantee ensures the Government cannot recover more than the equity in the property used to secure the loan.
A person’s scheme debt is usually recovered once the property is sold or, if the person dies, from their estate. Voluntary repayments are allowed at any time but are not required.
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 a technical and consequential amendment to enhance the administration of the scheme. By ensuring consistent naming of the scheme in primary and subordinate legislation, the amendment will make it easier for prospective and current participants to locate information about the scheme, navigate the relevant legislative regime, and interact with the Government regarding their participation.
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.
Kirsty Johnson
Branch Manager of the Payment Structures and Seniors Branch,
Delegate of the Secretary of the Department of Social Services