Publication:Sea Talk Spring 2007/Reserves entitled to housing help

Help with loans of up to $312,000 for those with 16 years service

By Paul Grieve, Assistant Director Housing and Removals Policy

Active Reservists could be eligible for home loan subsidies of up to $470 per month under the new Defence Home Ownership Assistance Scheme (DHOAS) to be introduced next July 1.

But eligibility and the level of entitlement will depend on length of continuous efficient service. And lapses of two years or more could cost Reservists eligibility and entitlement.

The new DHOAS, is designed to improve current ADF recruitment and retention rates.

The policy director for the new scheme says it will overcome the shortcomings of existing schemes by providing one that reflects contemporary housing and home finance markets and has the flexibility to keep pace with both.

Reserve Force members will become eligible for assistance under the DHOAS on completion of eight years efficient service performed in consecutive years.

"They will then become entitled to payment of the subsidy assistance on completing each subsequent year of efficient service," said the Director Housing and Removals Policy, Mr Robert McKellar. "For the purpose of eligibility and entitlement, efficient service across all categories of active Reserves will be 20 days of Reserve service performed in the Reserve training year. Eligible Reserve members will lose both eligibility and entitlement to the subsidy assistance where there is a break in efficient service of two years or more."

Although figures could vary between now and July 1, 2008, when the new scheme is due to come into force, Reservists will be eligible for subsidy assistance under a subsidised loan limit of:

• $16,000 after eight years service;
• $234,000 after 12 years of service; and
• $312,000 after 16 years of service.

Mr McKellar said the new scheme will also provide Reserve Force members with the opportunity to accelerate their eligibility when they provide continuous full-time service (CFTS).

"CFTS of less than six months will count as one year of efficient service towards eligibility while between six months and 12 months of CFTS will count as two years towards eligibility," he said. "The performance of CFTS will not change the rate at which an eligible member accrues a subsidy entitlement. If the subsidy is not accessed on becoming an eligible member, the entitlement accrues on a month-by-month basis for each subsequent year of efficient service. Extra years of subsidy are also granted for warlike service."

The new DHOAS will also mean some changes to the existing homeowner scheme for Permanent members transferring to the Standby Reserves.

"On transferring from the Permanent ADF to the Standby Reserves, a member will have two years to apply for the DHOAS subsidy and access their accrued subsidy assistance entitlement," Mr McKellar said. "During this period, if a member provides service, either as Reserve training days or CFTS, this service will contribute to the member's subsidy assistance entitlement. From the second anniversary of transferring to the Standby Reserves, a member who is not already accessing the DHOAS, and has provided no further service, either Reserve training days or CFTS, will no longer be able to apply. Their accrued subsidy entitlement will be frozen on this date, but will be preserved until the fifth anniversary of the member's transfer to the Standby Reserves, at which point it will expire."

Mr McKellar added that a member could reactivate an accrued subsidy assistance entitlement by rejoining the Permanent ADF before the fifth anniversary of his or her transfer to the Standby Reserves.

He said members should "exercise caution" when making a decision on home ownership in anticipation of the scheme being introduced. "While this is the Government's intention, it does not yet have a legal basis, does not establish an entitlement, and may be subject to change before July 1, 2008," he said. The most up to date information on the Defence Home Ownership Assistance Scheme and how it applies to Reservists is at intranet.defence.gov.au/pac or www.defence.gov.au/dpe/pac/.

The DHOAS - developments

• Work has begun to engage a scheme administrator and panel of home loan providers through a competitive tendering process.
• The pay and conditions website has been updated with information about lateral recruits, medical separation as a result of incapacity or invalidity, transferring from the Permanent Forces, members rejoining the Permanent Forces, and death benefits.
• The scheme will come into effect on July 1, 2008.