Veterans’ Entitlements (Home Equity Access Scheme —Market Value) Determination 2026

EXPLANATORY STATEMENT

Veterans’ Entitlements (Home Equity Access Scheme—Market Value) Determination 2026

EMPOWERING PROVISION

The Repatriation Commission (the Commission) makes this instrument under subsection 52ZMAA(6) of the Veterans’ Entitlements Act 1986 (the Act).

PURPOSE

The Veterans’ Entitlements (Home Equity Access Scheme—Market Value) Determination 2026 (the instrument) repeals the Veterans’ Entitlements (Pension Loans Scheme—Market Value) Determination 2022 (the repealed instrument).

The instrument substitutes references to the “Pensions Loans Scheme” with the “Home Equity Access Scheme” following the passing of the Regulatory Reform Omnibus Act 2025. The instrument otherwise replicates the repealed instrument and continues the policy enabled by the repealed instrument.

The instrument sets out the methods for determining 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 (the Scheme).

When the Scheme participant has the benefit of the no negative equity guarantee under the Scheme, this will limit the amount of the debt repayable by the participant to the Commonwealth under the Scheme to no more than the adjusted value of the property.

OVERVIEW

The Scheme allows eligible Australians of Age Pension and veteran pension age who meet certain residency requirements to access a loan payment, either by fortnightly instalments, as a lump sum, or both, from the Australian Government.

Amounts borrowed under the Scheme accrue as a debt to the Commonwealth, secured by a charge or caveat against nominated Australian real assets/property. The costs of registering and removing the charge or caveat are payable by the Scheme participant and can be added to the debt. An annual interest rate is charged, compounding fortnightly on the outstanding loan balance. The total debt is usually recovered when the securing property is sold or from the person's estate.

Voluntary repayments, in part or in full, can be made at any time. The debt will also be recoverable if the participant loses qualification for the Scheme. This may occur, for example, if the person does not maintain insurance of the securing property, or allows the property to become underinsured over time.

The Scheme also provides most participants with a ‘no negative equity’ guarantee that means the Commonwealth is not entitled to recover a debt amount that exceeds the adjusted value of a debtor’s real assets or property. The debt and charge securing the debt are discharged to the extent they exceed the adjusted value of the debtor’s real assets or property, determined by applying this instrument. This instrument sets out methods to value real assets or real property to generate the maximum value of the debt.

EXPLANATION OF PROVISIONS

Section 1 states the name of the instrument.

Section 2 provides that the instrument commences on 1 July 2026.

Section 3 sets out the authority for the Commission making the instrument, namely subsection 52ZMAA(6) of the Act.

Section 4 repeals the repealed instrument.

Section 5 provides the definitions used in this instrument.

Section 6 sets out the methods for working out the market value of real assets and real property and the methods by which to make adjustments to that value. The term ‘property’ applies when the participant personally owns the real estate securing the loan, which covers most participants. More rarely, the person may secure the loan by a guarantee given by a company or trustee of a trust in which the participant is an attributable stakeholder (defined in section 52ZZJ of the Act). In this case, the guarantee given by the company or trustee must be secured against real property of the company or trust, which is the ‘asset’ of the body.

Subsection 6(1) provides that the market value of real assets or real property, at the time a person seeks to repay their debt, or the Commonwealth seeks to recover the debt (known as the event time), is the amount worked out under subsection 6(2).

Subsection 6(2) provides that, subject to subsection 6(3), the market value of real assets or real property is worked out under one of four alternatives, depending upon the circumstances.

Paragraph 6(2)(a) provides that where the assets or property are sold before the event time and the person seeks to repay, or the Commonwealth seeks to recover the debt referred to in subsection 6(1), the market value of the assets or property is the sale price, unless the Commission reasonably believes that the property is undervalued, in which case subsection 6(3) applies. Paragraph 6(2)(a) is subject to subsection 6(3).

Paragraph 6(2)(b) provides that if paragraph 6(2)(a) does not apply i.e. the assets have not been sold, the Commission and the person seeking to repay the debt, or the person from whom the Commonwealth seeks to recover the debt, may agree a value of the assets or property. The value may be the Commonwealth’s last recorded value of the assets or property, if agreed by both parties.

Paragraph 6(2)(c) provides that if neither paragraph 6(2)(a) or paragraph 6(2)(b) apply—that is, where the value is not a sale price nor otherwise agreed and a market value of the property has been determined by an accredited valuer (as defined in section 4 above), the Commission may, if satisfied that:

• the market value for one or more days, (called a valuation day), within the period of 3 months before the time the person seeks to repay or the Commonwealth seeks to recover the debt, has been determined by an accredited valuer/s, and
• there has been no material change in circumstances affecting the market value since the most recent valuation day;

consider the market value is the value determined for the most recent valuation day. The later day in respect of which the value of the asset is determined (the valuation day) takes priority, even if the day on which the valuation was undertaken by the valuer is more recent.

The example in the table below shows the practical operation of paragraph 5(2)(c). In this scenario, the market value would be Valuation A because it has a more recent valuation day even though the valuation itself is older than Valuation B. 

Paragraph 6(2)(d) provides that if paragraph 6(2)(a) (property sold), paragraph 6(2)(b) (value agreed) and paragraph 6(2)(c) (an applicable valuation exists) do not apply, then the market value is the market value as determined by an accredited valuer. The value must be determined as at the time the person seeks to repay, or the Commonwealth seeks to recover the debt (the event time).

Subsection 6(3) limits paragraph 6(2)(a) in situations where the Commission reasonably believes that the sale price of real assets or real property has been reduced because the real assets or real property have been undervalued.

The undervaluation could occur because:

• the sale was not conducted in good faith. This may occur if for example the property was sold without due consideration given to the interests of the mortgagee; or
• the sale was not conducted on fair and reasonable terms. This may occur if for example:
  • the property or assets were sold without reasonable steps to advertise its sale;
  • the property or assets were not presented for sale in a reasonable condition such as being in need of essential repairs;
  • reasonable evidence of the property’s or assets’ value were not obtained prior to the sale; or
  • the property or assets were not sold by auction, unless it was appropriate to sell it in another way; or
• the sale was conducted between parties who were not dealing with each other at arm’s length; or
• or any other circumstance.

If the Commission reasonably believes undervaluation of this nature has occurred, subsection 6(3) applies so that the market value at the time of sale is taken to be the value determined by an accredited valuer. Subsection 6(3) is intended as a mechanism to prevent the market value and the Scheme’s Guarantee from being deliberately manipulated to reduce the amount of debt that could be recovered by the Commonwealth.

Subsection 6(4) provides that the market value of real assets or real property worked out under this section is reduced by the total value of any charges or encumbrances over the real assets or real property, other than the charge created to secure payment of a debt to the Commonwealth under the Scheme. The resulting amount is taken to be the adjusted value under section 52ZMAA of the Act and is the amount that is subject to the Scheme’s Guarantee. No adjustments are made for sales commissions, taxes or other costs associated with a sale.

The total value of any charges or encumbrances is worked out:

• if the assets or property is sold before the person seeks to repay or the Commonwealth seeks to recover the debt, immediately before the assets or property is sold; or
• if paragraph 6(2)(b) applies and the value is agreed, at the time of the agreement; or
• if paragraph 6(2)(c) applies and there is a recent, reliable valuation, at the end of the most recent valuation day; or
• if paragraph 6(2)(d) applies and a fresh valuation is undertaken, at the time the person seeks to repay or the Commonwealth seeks to recover the debt.

Consultation

In making the instrument under the Act, no specific consultation has been undertaken because DVA has maintained alignment with the repealed instrument.  As there are no changes to the policy enabled by the instrument under the Act, there are also no changes to outcomes for those entitled to benefits under the Act that might otherwise be required to be communicated more broadly. Consultation was also considered unnecessary because the instrument simply makes minor consequential changes to references to the Scheme because of changes enabled by the Regulatory Reform Omnibus Act 2025.

Human rights implications

This instrument is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment A.

Making the instrument

The instrument is made by the Repatriation Commission.

Approved by

Repatriation Commission

Rule-maker

Attachment A

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Veterans’ Entitlements (Home Equity Access Scheme—Market Value) Determination 2026

This Disallowable Legislative Instrument 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 (the recognised rights).

Overview of the Disallowable Legislative Instrument

The Veterans’ Entitlements (Home Equity Access Scheme—Market Value) Determination 2026 (the instrument) repeals the Veterans’ Entitlements (Pension Loans Scheme—Market Value) Determination 2022 (the repealed instrument).

This instrument sets out the methods for determining 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 (the Scheme). When the Scheme participant has the benefit of the no negative equity guarantee under the Scheme, this will limit the amount of the debt repayable by the participant to the Commonwealth under the Scheme to no more than the adjusted value of the property.

Human rights implications

The instrument engages the right to social security under article 9 of the International Covenant on Economic, Social and Cultural Rights.

The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system.

The Scheme allows veterans of pension age and others in receipt of income support who are of age pension age to improve their living standards in retirement by taking out a loan from the Australian Government, generally secured against the person’s Australian real estate assets.

The Scheme has a no negative equity guarantee (the Guarantee) that ensures the Commonwealth is generally not entitled to recover a debt amount that exceeds the adjusted value of a debtor’s real assets or property.

The instrument provides for the true market value of real assets or real property to be determined at the time a participant seeks to repay their debt under the Scheme, or the Commonwealth seeks to recover that debt. In general, this will limit the amount of the Scheme debt which they must repay.

The instrument will give those eligible to participate in the Scheme greater protection when it comes to repaying their Scheme debt, either voluntarily or from their estate, by valuing their property fairly and realistically. Provided the person has dealt with their property in a way which does not allow it to be sold under its value or the equity in the home reduced inconsistently with their obligation to repay their loan, the value determined under the instrument will limit their debt to the Commonwealth. The Scheme supports the human right to adequate income (given as a loan) during their lifetime, as a form of social security, and only be required to repay the loan to the extent of the value in their home.

Conclusion

The instrument is compatible with human rights as it does not raise any human rights issues and supports a person’s access to social security.

Repatriation Commission

Rule-Maker