What happens on the death of a borrower who is an eligible person?
30 What happens on the death of a borrower who is an eligible person?
Where:
a prescribed borrower dies and has a surviving spouse or de facto partner; and
the house to which the subsidised loan relates was, immediately before the borrower’s death, owned jointly by the borrower and the surviving spouse or de facto partner;
then, subject to section 29, subsidy continues to be payable on the loan.
Where:
a prescribed borrower dies and has a surviving spouse or de facto partner; and
the house to which the subsidised loan relates was, immediately before the borrower’s death, owned solely by the borrower;
subsidy on the loan is suspended until the house is sold or transferred under the borrower’s will or an intestacy law.
If:
subsidy is suspended; and
the house to which the subsidised loan relates is transferred under the borrower’s will or an intestacy law to a surviving spouse or de facto partner of the borrower who was living with the borrower immediately before the borrower’s death; and
the house is so transferred subject to the loan;
then, subject to section 29, the suspension ends and subsidy is payable on the loan on and after the day on which the suspension took effect.
If:
subsidy is suspended; and
the house to which the subsidised loan relates is transferred under the borrower’s will or an intestacy law to a surviving spouse or de facto partner; and
the house is so transferred subject to the loan; and
no surviving spouse or de facto partner of the borrower was living with the borrower immediately before the borrower’s death;
then, subject to section 29, the suspension ends and subsidy is payable on the loan on and after the day on which the suspension took effect.
Where subsidy is suspended, the Secretary must cause a written notice of the suspension to be given to the Bank in accordance with the agreement.
When subsidy is payable on a loan under this section, the relevant surviving spouse or de facto partner is to be treated, for the purposes of this Act, as if he or she were the subsidised borrower in relation to the loan.
In this section:
prescribed borrower means a subsidised borrower who is or was an eligible person.
This Act’s bill:Second reading speech
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