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Annual Report 2013-14

Volume 1, Part 2 : Performance

Program 1.16: Housing Assistance

The Defence Home Owner Scheme closed on 30 June 2010 and has been replaced by the Defence Home Owner Assistance Scheme, which started on 1 July 2008.

Defence Home Owner Scheme

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

There were 1,180 active loans at 30 June 2014 for a total of $1.6 million in subsidy payments during 2013–14. This was 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.

Defence Home Owner Assistance Scheme

The Defence Home Owner Assistance Scheme is an Australian 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 were in effective service in the ADF on or after 1 July 2008 and have completed a qualifying period and accrued a service credit.

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. The three appointed home loan providers are the Australian Defence Credit Union, the Defence Bank and the National Australia Bank.

During 2013–14, the scheme continued to attract a high level of interest from ADF members. A total of 6,022 applications were registered during the year, and 5,679 members received subsidy certificates. Fifty-four per cent of members who applied for a subsidy certificate indicated that the scheme influenced their decision to remain in the ADF, and 43 per cent indicated that it was a key factor in encouraging them to remain in the ADF.

At 30 June 2014, 19,007 members were receiving subsidy assistance under the scheme. In 2013–14, the value of subsidy assistance paid to eligible members totalled $73.0 million. The total amount paid in subsidy assistance since the commencement of the scheme is $356.8 million.

The Department of Veterans’ Affairs continued to meet its obligations under the legislation and memorandum of understanding (MOU) and has provided effective administration to the scheme.

The Department of Veterans’ Affairs referred 24 appeals for internal review of application outcomes to the delegate in Defence during the year. Four members applied to the Administrative Appeals Tribunal for an external review.

Operational costs

Under the MOU, the Department of Veterans’ Affairs is paid an annual management and service delivery fee for the administration of both schemes. In 2013–14, the administration costs totalled $5.2 million (excluding GST).

Defence received a total of $13.2 million in remuneration from the three home loan providers during the year.

Table 3.39: Program 1.16 deliverables



Provide ADF members with assistance to achieve home ownership that reflects the contemporary housing and home finance markets


Provide progressively higher levels of assistance for eligible members serving beyond the critical career points of four, eight and 12 years of service


Provision of quality services for the administration of the scheme, including the accurate and timely processing of member applications and issuing of subsidy certificates to eligible members


Table 3.40: Program 1.16 key performance indicators

Key performance indicator


Members respond to and take up the Defence Home Ownership Assistance Scheme


Ensure that interest rates provided to ADF members by the home loan providers are competitive with other interest rates in the market