The first $40,000 of an unspent home equity conversion loan is an exempt asset (1.1.E.170) for 90 days ONLY. IF after 90 days a customer has not spent the loan, the amount is an assessable asset (1.1.A.290).
Example 1: A customer gets a home equity conversion loan of $40,000 and spends the loan in 45 days. The loan is not counted as an asset for the full 45 days but is subject to the deeming provisions while it is held as a financial investment (1.1.F.135).
Example 2: A customer gets a home equity conversion loan of $70,000. S/he does NOT spend the loan within 90 days. Therefore:
Act reference: SSAct section 1118(1)(e) certain assets to be disregarded
Last reviewed: 30 October 2000