The announcement comes ahead of Thursday’s release of the midyear budget review, which is expected to see an improved budget position against the backdrop of rapidly recovering economy
The Morrison government will overhaul the Pension Loans Scheme which would see older Australians able to unlock the value of their home under a revamped reverse mortgage strategy.
With rates at record lows, the government will slash the scheme’s interest rate from 4.5 per cent to 3.95 per cent on January 1, to lower borrowing costs and give seniors access to loan payments for longer.
The announcement comes ahead of Thursday’s release of the midyear budget review, which is expected to see an improved budget position against the backdrop of rapidly recovering economy.
The midyear economic and fiscal outlook could be the treasurer’s last major economic showpiece should Prime Minister Scott Morrison head to the polls in March rather than May, and before the 2022/23 budget planned for March 29.
The prime minister said this provided a safe alternative for Australians to access the equity in their own home and improve their incomes and their living standards in their retirement years.
The scheme allows older Australians to get a voluntary non-taxable fortnightly loan from the government up to a maximum value of 150 per cent of the rate of the age pension.
The Morrison government is committed to finding new and innovative ways to support older Australians in their retirement, Minister for Families and Social Services Anne Ruston said.
The nation’s seniors should be given more choice and control of their retirement lifestyle, she said.
Ruston said this would give older Australians ‘more confidence’ to tap into their equity, she said.
She said: The Home Equity Access Scheme allows Australians over the Age Pension age – whether they are pensioners or self-funded retirees – to unlock this equity using a trusted Government product to boost their disposable income in retirement.