Australian property prices have had a strong record of growth over the past three decades, and many Australian retirees have benefited from that growth by seeing the value of their residential homes rise considerably. However, being asset rich but cash poor during retirement can pose problems for retirees in terms of meeting their daily living expenses.
The Pension Loans Scheme enables retirees in Australia to ‘liquidate’ their assets by getting a voluntary, non-taxable, fortnightly government loan using their residential homes as security. These loan payments can supplement other retirement income they may have, such as the age pension and superannuation entitlements. The Pension Loans Scheme is essentially a government reverse mortgage scheme.