The Pension Loans Scheme (PLS) can help you boost your Age Pension and Pension Boost can take the hard work out of the application process.
What is the PLS
The federal government’s PLS helps older Australians boost their Age Pension payment by unlocking the equity in their property.
The government provides recipients with a loan amount each fortnight – at a maximum payment level of 150 per cent of the full Age Pension, less any government pension currently received. Given the PLS is designed to assist seniors with their regular living costs, and live in their homes for longer, there is no upfront lump sum option available with this service.
So what does this mean? Currently, a couple receiving a full Age Pension can get a maximum of $712 per fortnight and a single on a full Age Pension $472 per fortnight. Part pensioners and self-funded retirees can access more. You can elect to receive the amount you require each fortnight – so long as it’s within the maximum – and you can alter your payments when you need to.
The PLS is a ‘reverse mortgage’ style contract that is secured against any property you own in Australia (relocatable homes or property in retirement villages are generally not eligible). A reverse mortgage simply means you are not obliged to make any repayments during the term of the loan, although you can make voluntary repayments any time you wish to, and there are no penalties or fees involved.
How does the PLS work?
Interest is charged on the outstanding loan amount each fortnight (currently the rate is 4.50 per cent p.a. variable). As with all reverse mortgages, because you don’t need to make any loan repayments, the interest compounds over time (in other words, you will be charged interest on the interest).
Apart from the legal costs to prepare and lodge/remove a caveat on your title (which is how the government secures its loan to you), there are no other fees and charges involved in the PLS. The caveat legal charge varies between $450 and $650 depending on which state your property is in.
You are required to repay the loan in full when either:
- you, or your estate, sell your property
- you (or you and your partner) have permanently moved out of your home and can’t maintain it any longer.
Who can the PLS help?
Pension Boost speaks to hundreds of seniors each week and understands the issues they’re trying to deal with. There seem to be four broad groups of seniors we talk to – those who are:
- in need of a large upfront amount of finance
- really struggling to live on the Age Pension and stressed about making ends meet
- currently managing to live on the Age Pension and other sources of income, but want to know what their options are in case they need them in future
- the kids (and even grandkids) who are worried about how their parents are coping, and are seeking options to help them live a better life.
What is Pension Boost and what role does it play in the PLS?
Pension Boost is a PLS specialist. We take on the hassle of dealing with Centrelink/Department of Veterans’ Affairs (DVA), acting as your agent, assisting you with your application and dealing with any questions raised by Centrelink/DVA.
Other ways Pension Boost assists seniors includes:
- educating them on what the PLS is, its ‘rules’ and how it works
- assisting them and their families to decide if the PLS may be of benefit to them
- demonstrating via this Pension Boost Calculator what the PLS may mean for them financially
- determining the level of pension loan that best suits their individual circumstances.
To date, we have helped seniors access $30 million via the PLS and have a near 100 per cent loan approval success record with Centrelink/DVA.
What are Pension Boost’s fees?
We charge an affordable, once only, fee when applying for the PLS, see table below.
Our fees include:
- a personalised PLS report
- a PLS specialist consultation
- preparation of your PLS application forms
- lodgement of your PLS application
- tracking the progress of your PLS application
- responding to any Centrelink/DVA queries
- reviewing your PLS approval.
An example of how Pension Boost helped a couple access the PLS
John (72) and Margaret (70) are a married couple who own a home in Ocean Grove, Victoria. They had to make payments on an outstanding home loan using part of their Age Pension, which at the time was $37,014 per year. This left them in an uncomfortable financial position, making it a struggle to make ends meet.
Their home was valued at $550,000 and they had $150,000 left on their mortgage, leaving them with $400,000 of net equity in their home.
Pension Boost helped John and Margaret apply for the PLS, which provided them with an additional $712 per fortnight (or $18,507 per year) to live on, increasing their total income to $55,521 per year. This meant they could afford their regular bills while also taking pressure off their home loan payments. Taking inflation into account, they will be able to boost their Age Pension by this amount for 10 years – until John is 82 and Margaret is 80.
Click here to see more case studies of other seniors assisted by Pension Boost.
Are you eligible for the PLS?
Whether you’re single or a couple, even if you have an existing reverse mortgage, or you’re not on the Age Pension, as long as you (and/or your partner) are at least 66 years of age and own property in Australia, you may be eligible for the PLS. To find out for sure, try Pension Boost’s PLS Calculator by clicking on the button below or, if you prefer to speak to a PLS specialist, just call 1300 266 786 – and unlock a better life today!