2019 Updates to the Pension Loan Scheme

2019 Updates to the Pension Loan Scheme


Changes have been made to the Pension Loan Scheme (PLS) under the federal government that came into effect 1 July 2019. The updates aimed to improve the previous scheme and help more retirees boost their retirement income and pay for extra expenses such as home care.

The key features of the new Pension Loan Scheme are:

  • Extended eligibility to all Australians of age pension age, now including those currently received the maximum rate age pension.
  • The maximum PLS income stream will be the difference between your current age pension payment and 150% of the age pension rate.
  • A single person will be able to borrow up to $36,000 a year and a couple could potentially borrow up to $54,000 per year, paid in monthly instalments.
  • PSL loans are not taxable and are not counted in the age pension income test.
  • The interest rate is 5.25% pa compound, which has been the same since 1997.
  • There are no establishment fees or monthly account fees.

To be eligible for the PLS, the following criteria must be met:

  • You or your partner have reached age pension age.
  • You own real estate with enough equity to secure a loan.
  • You have adequate insurance covering the property.
  • You are not bankrupt or subject to a personal insolvency agreement.
  • You qualify for one of the following pensions: age pension, bereavement allowance, carer payment, disability support pension, widow pension, or wife pension.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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