As an ADF member, you’ve signed up for more than just a job, it’s a lifestyle that packs in its fair share of moves and changes.
And in the middle of all this, there’s a real need for a solid base – a place to call home.
It’s a cornerstone of stability for service members like you who are frequently on the move, adapting to new postings and assignments.
That’s where the three ADF housing entitlements — DHOAS, HPAS, and HPSEA — swing into the picture.
These housing schemes are a financial lifeline for getting a foothold on the property ladder for defence personnel like you.
But let’s face it, getting to grips with what’s on offer can be a bit of a headache.
This isn’t about hyping up these schemes. It’s about laying out what’s what so you can figure out which one ticks the boxes for your situation.
The goal is to help you understand what to consider for each scheme, so you know exactly how to compare the three ADF housing entitlements and decide what works for you.
The 3 main ADF housing entitlements
DHOAS, HPAS, and HPSEA are defence housing schemes providing strong financial help designed specifically for ADF members.
If you’re purchasing your first property, moving, or covering the costs of a sale, these entitlements provide financial support. With these, a stable home life is made even more possible for you and the loved ones awaiting your safe return.
What is DHOAS?
The Defence Home Ownership Assistance Scheme (DHOAS) is designed to help service members climb onto the property ownership rung.
It’s a subsidy that helps reduce the cost of a mortgage, making homeownership more attainable for those serving in the Australian military.
DHOAS eligibility criteria
- Service threshold
The door to DHOAS opens after a qualifying period of service. You’ll need to have clocked in a certain number of years in uniform to be considered.
- Service status
Whether you’re on active duty or a reservist, your current service status plays a part. The scheme caters to both, but the fine print varies.
- Discharge conditions
If you’ve recently hung up your uniform, there’s a post-discharge window where you can apply. But wait too long, and you might miss out.
The benefits of DHOAS
- Subsidised interest
Enjoy a chunk of your home loan interest subsidised by the government. It’s a relief on your monthly budget that can add up to significant savings over time.
- Choice of lender
Enjoy a chunk of your home loan interest subsidised by the government. It’s a relief on your monthly budget that can add up to significant savings over time.
- Portability
Got a new posting? The scheme moves with you. You can transfer the subsidy to a new property if your service dictates a change in location.
The limitations of DHOAS
- Property limits
There’s a cap on the value of the property you can purchase under this scheme. High-end mansions are off the table; it’s about modesty and affordability.
- Loan-to-value ratio
You’ll need to invest a minimum amount of your own cash upfront. The scheme doesn’t cover 100% of the property value, so you must have some skin in the game.
The level of subsidy you receive isn’t a flat rate; it’s influenced by your length of service and changes as your service continues. More time in service could mean more subsidy, up to a point.
What is HPAS?
The Home Purchase Assistance Scheme (HPAS) offers a strategic benefit from the ADF, providing a financial safety net to address the housing challenges that come with military life.
This programme knows the mobile nature of military careers, offering support that reduces the stress of relocations on ADF members and their families.
With HPAS, the ADF acknowledges the sacrifices made by its personnel, making sure that moves between assignments and postings do not become financial burdens that disrupt the ADF’s home life.
HPAS eligibility criteria
- Frequent relocations
Eligibility hinges on the need to relocate often due to service requirements, which can impose a financial strain not commonly experienced in civilian life.
- Current service requirement
Your current engagement with the ADF must meet the threshold. HPAS is a benefit for those actively navigating the demands of service.
- Rank and family status
Your rank and whether you have dependents can affect eligibility. HPAS recognises the varied needs of single members versus those with families.
The benefits of HPAS
- Relocation subsidies
To ease the financial hit from frequent moves, HPAS provides subsidies that address the costs associated with relocating, including temporary accommodations.
- Rent assistance
If you’re renting, HPAS can offer a supplement to help cover higher rental costs in some areas, easing the burden on your wallet.
- Flexibility
The programme has a degree of flexibility, acknowledging that housing needs can change rapidly and unpredictably due to the nature of service commitments.
The limitations of HPAS
- Geographical restrictions
HPAS benefits might vary based on your posting location, with certain areas attracting higher levels of assistance than others.
- Time-bound benefits
Assistance is not indefinite; it’s aligned with the duration of your posting, requiring re-evaluation and potential adjustment with each new move.
- Partial Coverage
While HPAS assists with housing costs, it’s not a full coverage program. You’ll still be responsible for some of the costs, ensuring you’re invested in your housing decisions.
What is HPSEA?
The Home Purchase or Sale Expenses Allowance (HPSEA) steps in to lighten the financial load when you’re dealing with property transactions linked to relocations.
It’s a scheme that offers reimbursement for certain costs when selling your home or when you’re buying another after your first.
Should your service require a move and you decide to sell, HPSEA is there to assist with the associated costs, ensuring your focus remains on your service, not on your bank account.
HPSEA eligibility criteria
- Mandatory posting
Available when you’re posted to a new location and the move is mandatory. HPSEA only applies if you’re in the buy-sell-buy cycle that comes with your posting.
- Ownership requirement
You must have owned the home and lived in it as your principal place of residence for a certain period before the posting.
- Distance clause
There’s a minimum distance requirement between your current posting and the new location. This is to make sure that the allowance is provided for those who are relocating a significant distance, not just moving within the same area or city.
The benefits of HPSEA
- Cost coverage
HPSEA assists with specific out-of-pocket expenses from the sale of your property, such as legal fees, agent commissions, and advertising costs.
- Relocation flexibility
The scheme allows ADF members like you to sell your homes without the full weight of financial loss, thus facilitating a smoother transition to new postings.
- Reimbursement on stamp duty
In certain circumstances, HPSEA may cover some of the stamp duty paid on purchasing your next home.
The limitations of HPSEA
- Cap on claims
There is a ceiling to the amount that can be claimed, which means not all expenses may be covered. This cap ensures fair use of the scheme across the board.
- Geographic restrictions
In some instances, properties located beyond certain geographical boundaries or in areas not recognised by the scheme may not qualify for the allowance.
- Use cycle
Typically, HPSEA can only be used once for each posting cycle, which means any additional properties sold outside of the official relocation won’t be covered.
5 Considerations for Choosing the Right Housing Scheme
Now that you have a clear idea of the three main ADF housing entitlements available to you, it’s time to know exactly what you need to consider before committing to a scheme.
Remember, this decision is not just about the here and now; it’s about shaping a future that holds firm through service transitions, and life shifts that directly affect you and those around you.
- Your long-term service plans
The length and nature of your service commitment are important in choosing a housing scheme.
If your career horizon is long and likely to involve many relocations, flexibility in housing support might be a priority. And if you’re nearing service completion, a scheme offering benefits that extends into civilian life may be preferable.
- Financial preparedness and planning
Financial readiness cannot be overstated.
It’s essential to know your current savings, ongoing income, and financial commitments. A scheme that complements your financial health will ensure that the support it offers is a boon, not a burden.
- Impacts on your family
Your choice will ripple through your family life.
If your family values consistency in living arrangements, then a scheme offering stability with fewer moves could be ideal. On the other hand, a more flexible scheme could be better for those who cope well with change.
- Benefits against restrictions
Every scheme has its own set of benefits and restrictions. Measure the tangible gains like financial subsidies against any potential constraints, such as eligibility timeframes or geographical limitations. It’s about finding a balance that fits your life plan.
- Professional advice
The complexity of each option and how it applies to you personally might require professional guidance. Speaking with a financial advisor or defence mortgage broker who understands defence housing specifically can shed light on which scheme could serve your unique situation best.
Knowing what’s right for you
When considering ADF housing entitlements, you’re looking at three main options: DHOAS, HPAS, and HPSEA.
Each has a distinct role, whether it’s to assist in buying your first home or to ease the financial strain of frequent relocations.
Is DHOAS worth it? It could be because it offers subsidy benefits that reward service longevity.
HPAS, on the other hand, steps in to lighten the load with upfront costs, which is particularly beneficial for first-time buyers.
Meanwhile, HPSEA is there to smooth the financial bumps when it’s time to sell and move, making sure that you’re not left out of pocket during transitions.
Reflect on your long-term plans, both within the service and beyond, your current financial health, and how a stable or flexible living situation will affect your family.
Weigh the immediate perks against the long-term considerations of each scheme.
The right choice should not only reflect your current circumstances but also your future aspirations.
