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Program 1.16 - Housing Assistance

Defence Home Owner Scheme

The Defence Home Owner Scheme provides a subsidy on the interest payable on home loans between $10,000 and $80,000 (held by clients who applied prior to 30 June 2010). The benefits are provided under an agreement between the National Australia Bank and the Commonwealth Government. The subsidy amount is calculated at 40 per cent of the average monthly interest on the loan.

Prior to its closure, the scheme was available to permanent ADF members who enlisted between 15 May 1985 and 30 June 2008 and to those permanent ADF members who elected to revoke their entitlement under the Defence Service Homes Scheme in favour of a Defence Home Owner Scheme entitlement. Reserves and Emergency Force personnel who provided efficient part- time service were also eligible for assistance. In some limited circumstances, eligible members who meet certain criteria and did not access their entitlement prior to the 30 June closure may apply for a similar benefit (a subsidised loan of up to $80,000) under the new Defence Home Owner Assistance Scheme.


There have been no applications for an entitlement certificate since the scheme closed on 30 June 2010. There were 1,569 active loans at 30 June 2013 for a total of $2.3m in payments during 2012-13. This represents a significant decline in the number of members receiving the Home Owner Scheme subsidy since the introduction of the Defence Home Owner Assistance Scheme on 1 July 2008. The National Australia Bank has met its obligations to the Commonwealth as the appointed home loan provider.

Table 3.40 - Comparison of activities, 2008-09 to 2012-13

Table 3.40 - Comparison of activities, 2008-09 to 2012-13
Activity 2008-09 2009-10 2010-11 2011-12 2012-13
Applications for entitlement certificate received 230 193 2 0 0
Entitlement certificate issued 196 146 0 0 0
Applications for entitlement certificate declined or withdrawn 34 47 2 0 0
Applications for payments of subsidy received 132 58 46 0 0
Applications for payments of subsidy approved 130 57 46 0 0
Applications for subsidy declined or withdrawn 2 1 0 0 0
Amount of Commonwealth subsidy paid $8.1m $4.3m $4.3m $3.5m $2.3m
Number of subsidy payees at 30 June 2013 4,176 3,172 2,564 2,062 1,569

Entitlement certificates are valid for 12 months.

Defence Home Owner Assistance Scheme

The Defence Home Owner Assistance Scheme is a Commonwealth Government initiative that provides a subsidy on the interest payable on a home loan for members of the ADF. The scheme is open to current and former ADF members who have been in effective service in the ADF on or after 1 July 2008 and who have completed a qualifying period and accrued a Service credit.

HMAS Dechaineux leads HMAS Waller and HMAS Sheean in formation.

The Department of Veterans' Affairs, as the scheme administrator, is responsible for assessing member applications, issuing subsidy certificates to eligible members and processing subsidy payments.

Three appointed home loan providers have the exclusive right to offer members home loans. They are Australian Defence Credit Union, the Defence Bank (formerly the Defence Force Credit Union) and the National Australia Bank.


In its fifth year of operation, the scheme continued to attract a high level of interest from ADF members. A total of 6,010 applications were registered during the year, and 5,675 members received subsidy certificates. Fifty- one per cent of members who applied for a subsidy certificate indicated that the scheme was an influence on their decision to remain in the ADF, and 41 per cent of members indicated it was a key factor in encouraging them to remain in the ADF.

At 30 June 2013, 17,508 members were receiving subsidy assistance under the scheme. In 2012-13, the value of subsidy assistance paid to eligible members totalled $74.63m. The total amount paid in subsidy assistance since the commencement of the scheme is $283m.

The Department of Veterans' Affairs continued to meet its obligations under the legislation and Memorandum of Understanding and has provided effective service to the scheme. Defence is satisfied with its performance in administering this scheme and managing the panel of home loan providers to ensure they provide competitive home loan products and services to eligible ADF members. Defence approved a two- year extension to the Memorandum of Understanding for the period 2013-15.

The Department of Veterans' Affairs referred 23 appeals for internal review to the delegate in Defence during the year. Three members applied to the Administrative Appeals Tribunal for an external review.

Operational costs

The Department of Veterans' Affairs is paid an annual management and service delivery fee for the administration of both schemes. In 2012-13, the administration costs totalled $4.5m (excluding GST).

Defence received a total of $11.1m in remuneration from the three home loan providers during the year.

Table 3.42 - Program 1.16 deliverables

Table 3.42 - Program 1.16 deliverables
Deliverable Status
Provide ADF members with assistance to achieve home ownership that reflects the contemporary housing and home finance markets Met
Provide progressively higher levels of assistance for eligible members serving beyond the critical career points of four, eight and twelve years of service Met
Provide quality services for the administration of the scheme, including the accurate and timely processing of member applications and issuing of subsidy certificates Met

Table 3.43 - Program 1.16 key performance indicators

Table 3.43 - Program 1.16 key performance indicators
Key performance indicator Status
Members respond to and take up the scheme Met
Ensure that interest rates provided to ADF members by the home loan providers are competitive with other interest rates in the market Met