Home equity conversion schemes

A home equity conversion scheme is a type of loan and not considered income for benefit purposes.

A home equity conversion scheme allows a person to borrow against the equity in their home. When they die, or if the home is sold, the loan (including any interest) is repaid from the sale of the home.

This is also known as a reverse mortgage or home equity release scheme.

A home equity conversion scheme is not considered income for benefit purposes. This is regardless of whether it’s a:

• regular payment (periodic), eg when the client gets two or three (or more) payments within a 52 week period or
• one-off lump sum payment

The home equity conversion scheme is considered a cash asset when it's paid as a:

• one-off lump sum, or
• periodic payment and held as a cash asset in the client's bank account.

If the lump sum or periodic payments are held in a bank account and isn't used to pay for a major expense, it may affect other payments, such as Accommodation Supplement or Temporary Additional Support.

Examples of major expenses include but are not limited to:

• a new car
• house repairs or maintenance
• a holiday
• a medical operation

Note it is not appropriate for clients to be referred to equity conversion schemes if they are in hardship.