Financial advisers will need to be authorised under an Australian Credit Licence to provide advice on the pension loan scheme under recently proposed changes to legislation, aged care support service Aged Care Steps has cautioned.
In a statement, Aged Care Steps said ASIC had recently confirmed that changes to the pension loan scheme outlined in the federal budget will mean advice on the pension loan scheme will fall under the authorisation of the Australian Credit Licence regime.
“This means that unless an adviser is authorised under an Australian Credit Licence, they cannot provide advice on the pension loans scheme and will be limited to strategy advice on the use of equity release options in general,” said Aged Care Steps director Louise Biti.
“If not authorised and clients wish to investigate which equity release product is appropriate (including the use of the pension loans scheme) advisers can refer them to a licensed credit broker who understands the pension loans scheme or to the Centrelink Financial Information Service.”
While the legislation has not yet passed, it is slated to become effective from 1 July 2019.
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