» Permanent Forces
» Eligibility Requirements
» Length of Entitlement
» Accessing DHOAS Entitlement
» Subsidy Payments and Lump Sum
» Exemption from Effective Service Requirement
» Transferring to the Reserves
Permanent Forces
This section provides details about DHOAS eligibility and entitlements for Permanent ADF members.
The length of the qualifying period that Permanent members need to complete, and the service milestones they need to reach to move to higher subsidy tiers, differ from the Reserves.
Key factors to consider around DHOAS eligibility and entitlement are:
- Completing the qualifying period and gaining a minimum service credit
- Identifying your eligible subsidy tier, and calculating your subsidy payments based on your tier and actual home loan amount
- Accruing entitlement to DHOAS, including additional entitlement accrued from warlike service and the impact of previous Defence home ownership schemes, DHOS or DSH or breaks in service
- Accessing your entitlement, including the option of a lump sum payment (if eligible)
Information specific to Permanent members is provided on each of these four topics.
For more detailed information, you can also refer to the other sections under Eligibility and Entitlement, including the Lump Sum, Warlike Service, Switching to DHOAS, Service Variables, Breaks in Service and Separation.
IMPORTANT NOTE
Your eligibility and entitlement to DHOAS can change significantly if your circumstances change. For example, if you separate from the ADF; your one-off, post-separation Subsidy Certificate expires after 12 months; or you do not complete effective service as a Reservist.
If you sought information about DHOAS some time ago and were advised at that time you were eligible for DHOAS or had a certain level of entitlement, please do not assume this advice remains valid if your circumstances have changed.
You are urged to speak again with a DHOAS assistant or to re-check this website to ensure your understanding of your eligibility and entitlement remains correct.
Eligibility requirements
Minimum qualifying period
Permanent ADF members must have served on or after 1 July 2008 to be eligible for DHOAS.
You first need to complete a qualifying period of four consecutive years of Permanent service.
During this qualifying period, your continuity of service is broken if you separate from the ADF and re-enlist. You can take leave without pay of up to 12 months without breaking your continuity of service.
If you do break your service continuity, you will need to re-start your qualifying period of four years from the date you re-enlist.
Service Credit to access DHOAS
After you've completed your qualifying period, you then need to complete sufficient service to gain a "Service Credit".
Permanent members accrue DHOAS entitlement monthly.
This means you will gain a minimum "Service Credit" once you've completed one month of service after your qualifying period.
You can then apply to DVA for a Subsidy Certificate to access DHOAS.
You can keep accrueing entitlement to DHOAS while you serve in the ADF, up to a maximum of 20 years without warlike service and up to 25 years with warlike service.
Any entitlement to DHOAS that you do not access while in the ADF, you can access after you separate (at the Tier 3 level if you have served for over 20 years by the time you separate, and at the Tier 1 level if you have served under 20 years).
Please note that any period of time you have accessed one of the Defence loan subsidy schemes, either the Defence HomeOwner Scheme or Defence Service Homes, will be subtracted from your entitlement to DHOAS. See Accrued Entitlement. Breaks in service can also impact on your Service Credit.
CHECK: You should check your PMKeyS records to ensure that they're up-to-date and include all of your service in the ADF, in either the Permanent Forces or the Reservists, as well as any war-like service you have completed.
If your records include any errors or omissions you should raise the matter with your chain-of-command.
If your records are out-of-date and we check your DHOAS eligibility or entitlement against them when it is time to progress your subsidy payments or to determine your Service Credit, this may result in a miscalculation. This could result in a drop to your subsidy tier level or even the cessation of your subsidy payment.
Period of subsidy assistance
You can receive DHOAS assistance for as long as you have a Service Credit (and an eligible DHOAS home loan). Once your DHOAS Service Credit is expended, your subsidy payments will cease however much longer your DHOAS home loan repayments may continue. Once your accrue further entitlement to DHOAS your payments can resume, as long as all other conditions are met.
For every month of effective ADF service you complete after your initial qualifying period of four years, you will accrue entitlement to one month of subsidy assistance (or, one year of DHOAS entitlement for every year of ADF service).
Therefore, your Service Credit equals the total years of ADF service you have completed, minus your qualifying period.
Once you start accessing the DHOAS subsidy payments you stop adding to your Service Credit.
You can access the DHOAS subsidy as long as you are in the ADF. Then, after you separate, you can continue to access DHOAS using your outstanding Service Credit.
You can accrue and access up to a maximum of 20 years of DHOAS assistance without warlike service. This may increase up to 25 years if you have provided warlike service.
Warlike service and previous access to Defence loan subsidy schemes can impact on your total Service Credit (see details below).
Example
You are a current serving member and have been in the Permanent ADF for six years. If you subtract your qualifying period of four years, you have two years of accrued entitlement - your Service Credit.
You start receiving the DHOAS subsidy today. You can continue to accrue then access the DHOAS subsidy for as long as you are in the ADF.
Then, after you separate, you will be able to receive DHOAS for another two years, using your outstanding Service Credit. (Your Service Credit may increase with warlike service).
Please note the total combined period of time that you can receive DHOAS, before and after separation, is up to your maximum entitlement of either 20 or 25 years.
CHECK: You should check your PMKeyS records to ensure that they're up-to-date and include all of your service in the ADF, in either the Permanent Forces or the Reservists, as well as any war-like service you have completed.
If your records include any errors or omissions you should raise the matter with your chain-of-command.
If your records are out-of-date and we check your DHOAS eligibility or entitlement against them when it is time to progress your subsidy payments or to determine your Service Credit, this may result in a miscalculation. This could result in a drop to your subsidy tier level or even your payments being ceased.
Warlike service
If you complete warlike service you can extend the period of time that you receive DHOAS. You will be entitled to additional periods of subsidy assistance as set out in the following table (* see definition of a "month" below):
Period of warlike service** | Additional subsidy periods |
| Not more than 3 months | 2 years |
| More than 3 but not more than 6 months | 3 years |
| More than 6 but not more than 9 months | 4 years |
| More than 9 months | 5 years |
- ** Any time spent on out-of-country leave during your warlike service does not count towards the warlike service bonus period.
You can accrue up to a total of 25 years entitlement to DHOAS when you include warlike service.
Please note warlike service will not fast-track your qualifying period of four years.
Nor will it fast-track you to a higher subsidy tier level. You still need to complete the minimum years of service required to be eligible for a higher subsidy tier.
Warlike service only increases the total period of time over which you may receive the DHOAS assistance.
Please note your additional accrued entitlement from warlike service is recognised for the purpose of converting your available service credit into a lump sum (up to a maximum of four years).
Example
You're a member of the Permanent ADF who has completed three consecutive years of service in total, including seven months of warlike service.
You still must complete another year of service before you finish your four year qualifying period for DHOAS.
However, on becoming an eligible member you will have accumulated an extra four years accrued DHOAS subsidy entitlement as a result of your warlike service.
This means you would be able to accrue and access DHOAS assistance for as long as you are in the ADF. Then, after you separate, you could continue to receive DHOAS for another four years (as a result of your warlike service).
Please note the total combined period of time that you can receive DHOAS, before and after separation, is up to your maximum entitlement (of either 20 or 25 years).
Alternatively, you may wish to convert your four years of extra accrued entitlement from your warlike service into a lump sum, if you're eligible to do so (see Lump Sum).
Definition of a "Month"
Definition of a "Month": a "calender month" (as defined by the Act Interpretation Act 1901) means a period that meets both the following criteria:
a. it starts at the beginning of a day of a month
b. it ends at either of these times:
i. immediately before the beginning of the corresponding day of the next month
ii if there is no corresponding day in the next month - at the end of the next month
For example: 12 May 2000 - 11 June 2000; 30 January 2005 - 28 February 2005.
Previous schemes and entitlement
If you have previously accessed a Defence scheme, either the Defence HomeOwner Scheme (DHOS) or Defence Service Homes (DSH), this will impact on the length of time you can access DHOAS.
You need to subtract the period of time that you have received the DHOS or DSH benefits from the length of your accrued DHOAS entitlement.
It will not impact on your eligible subsidy tier or the amount of subsidy you receive, but on the length of time you can receive the DHOAS subsidy payments.
Please note a member can accrue a maximum of 20 years entitlement to DHOAS, without completing warlike service, and a maximum of 25 years with warlike service.
If you have previously accessed DHOS or DSH for as long or longer than your maximum DHOAS entitlement, then you will be unable to access DHOAS even if you continue to serve in the ADF.
Example
You have served in the Permanent ADF for 16 years, which means you have an accrued entitlement to DHOAS of 12 years (total years of service minus your four year qualifying period).
However, you have received benefits under the old scheme, DHOS, for eight years. These eight years are subtracted from your 12 years of accrued entitlement.
This leaves you with four years of accrued entitlement to DHOAS.
If you start receiving the DHOAS subsidy today, you can continuously accrue and access your DHOAS entitlement for as long as you are in the ADF. After you separate, you can continue to receive DHOAS for another four years using up your outstanding accrued entitlement.
Please note the total combined period of time that you can receive DHOAS, DHOS or DSH, before and after separation, is up to your maximum entitlement of 20 or 25 years.
As you have completed 16 years of service you're entitled to receive subsidy assistance at the Tier 3 level (as long as you're in the ADF.)
Please note that after separation, benefits are paid at the Tier 1 level if you separate before completing 20 years of service, and at the Tier 3 level if you stay for over 20 years.
Accessing your DHOAS entitlement
Once you have completed your initial qualifying period, you can accrue entitlement to DHOAS as long as you serve in the ADF (up to a maximum of 20 years without warlike service and up to 25 years with warlike service.)
Once you start receiving the DHOAS subsidy, you stop adding to your accrued entitlement. Any remaining entitlement ("Service Credit") you have to DHOAS you can access after you separate from the ADF.
For example, you are a current serving member and you've been in the Permanent Forces for 10 years. Subtract your four year qualifying period and you have six years of accrued entitlement to DHOAS.
If you start accessing your DHOAS subsidy today, you will be able to continuously accrue then access your entitlement to DHOAS while you serve in the ADF (and have an eligible DHOAS home loan).
Then, after you separate, you will be able to continue to access the DHOAS subsidy for another six years, using the entitlement you had already accrued before you started accessing the subsidy payments. Your accrued entitlement may be extended if you complete warlike service.
In total, you can access DHOAS for up to a maximum of 20 or 25 years.
Access to Lump Sum
You may wish to convert up to four years of your accrued entitlement to DHOAS into a lump sum. Please see Subsidy Payments and Lump Sum.
Access to DHOAS after separating
If you have an eligible DHOAS home loan, you can access your accrued DHOAS entitlement after you separate from the ADF.
You will be able to receive DHOAS assistance for as long as you have an accrued entitlement.
For example, if at separation you've been a Permanent member for 14 years service, you will have 10 years accrued entitlement (which is your total years of service minus your four year qualifying period). (You will also have additional entitlement if you have completed warlike service.)
You will be able to receive DHOAS assistance for 10 years after you separate.
Whether or not you access your DHOAS entitlement immediately or at a later date, or whether you access it before or after separating from the ADF, it does not impact on the length of time that you can receive DHOAS.
However, members should be aware that if you have not completed more than 20 years of service at the time you separate from the ADF your remaining DHOAS entitlement will be paid at the Tier 1 level, even if you've completed the minimum years of service required for Tier 2 and Tier 3 benefits.
If you have completed over 20 years of service at separation you will receive Tier 3 subsidy payments.
You are entitled to one Subsidy Certificate after discharge, and you must apply for it within two years of discharging. We would suggest that you apply for a Subsidy Certificate before discharging (if you can use it within 12 months), so that your post-discharge Certificate can be accessed at a later date if necessary.
If you are making instalments on a construction loan and you have discharged, you may wish to defer applying for your one post-discharge Subsidy Certificate until construction is complete.
Please note that you must access your accrued DHOAS entitlement within two years of when you cease to be a member of the Permanent Forces or an active member of the Reserves, whichever is the later, or you will forfeit your entitlements if you do not rejoin the ADF.
If you are already in receipt of a DHOAS subsidy and you discharge from the ADF, you must advise DVA using the Change of Circumstances form.
Subsidy tiers
You will be eligible under one of three subsidy tiers. The longer you have served as a Permanent ADF member the higher tier level you will be eligible for (see table below):
* Members who have completed a minimum of four years but not more than eight years are eligible under Tier 1
* Members who have completed a minimum of eight years but not more than 12 years are eligible for Tier 2 benefits; * Members who have finished 12 years or more of service are eligible for Tier 3 benefits
When calculating your subsidy tier level, you need to count your total years of service in the ADF. Do not subtract your qualifying period of four years (as you do if you're working out your accrued entitlement).
For example, if you started in the ADF in 1998 and have served each year since then, you have completed 10 years of service. That means you are eligible to receive Tier 2 benefits.
For discharging members, if you've served for over 20 years at the time of separation you'll receive your subsidy at the Tier 3 level. If you've served less, you'll receive your subsidy at the Tier 1 level.
New monthly subsidy payments are calculated on the subsidised loan limits that are valid when your DHOAS assistance commences.
If your first subsidy payment commences from or after July 2010, refer to the Subsidy Tier table below which shows subsidy values that are valid for 2010-11.
The 2010-11 subsidised loan limits do not apply to subsidies that are first paid in July 2010 but cover the payment periods of May or June 2010.
If your first DHOAS subsidy payment period commenced prior to 1 July 2010, your subsidy payments are calculated on 2009-10 Subsidised Loan Limits.
If your first DHOAS subsidy payment period commenced prior to 1 July 2009, your subsidy payments are calculated on 2008-09 Subsidised Loan Limits.
DHOAS Subsidy Tiers 2010-11
Minimum service | Subsidy tier | Subsidised loan limit* | Maximum monthly subsidy* |
| 4 years | Tier 1 | $197,773 | Up to $281 |
| 8 years | Tier 2 | $296,659 | Up to $422 |
| 12 years | Tier 3 | $395,546 | Up to $562 |
- This table shows the 2010-11 Subsidised Loan Limits. Your new subsidy will be calculated on these subsidised loan limits if your first payment period starts from or after July 2010. If your first payment period started before 1 July 2010, see 2009-10 Subsidised Loan Limits or before 1 July 2009, see 2008-09 Subsidised Loan Limits.
- Monthly subsidy values shown here are based on the median interest rate valid as at August 2010. These monthly subsidy values may change based on fluctuations in interest rates.
Subsidy amounts
Your eligible tier determines your subsidised loan limit, which is the portion of your home loan that will attract a DHOAS subsidy.
Your monthly subsidy payment is based on the amount you borrow up to your subsidised loan limit.
If you borrow an amount that is equal to or greater than the subsidised loan limit in your eligible tier, then you will be entitled to payment of your tier's maximum monthly subsidy.
For example, if you're eligible under Tier 2 and you borrow equal to or more than $296,659 (representing your subsidised loan limit) you will receive the maximum subsidy payable of $422 per month (as at August 2010).
This is because the maximum monthly subsidy is calculated on the maximum subsidised loan limit, in each tier. In your case, this is $296,659.
If you borrow an amount that is less than your eligible loan limit then you will receive a subsidy on the full amount of your loan. Your subsidy will be less than the maximum monthly subsidy payable (although it will represent a comparable proportion).
For example, if you're eligible under Tier 2 and you borrow $250,000, you would receive $355. This is the maximum subsidy payable on $250,000 (at present).
All DHOAS subsidy amounts are calculated using the same DHOAS formula.
The formula is 37.5% of the interest incurred on your eligible home loan, over 25 years (this is regardless of your actual home loan period.)
A median interest rate, based on the rates of Australian home lenders, is used to calculate the interest incurred on all DHOAS home loans. The actual interest rate on your home loan is not used.
For the DHOAS formula, the median interest rate is capped at 8.95%. Under this maximum, the rate used can fluctuate in line with interest rates changes and impact on your monthly subsidy payment amounts.
Example - Tier eligibility
You are a member in the Permanent ADF who has completed five years of uninterrupted service when you access your DHOAS entitlement.
Given you have completed at least five years of service (but not more than eight), you are entitled to receive benefits at the Tier 1 subsidy level.
Service years | Eligible Tier | Subsidised Loan | Maximum monthly |
| 5 years | Tier 1 | $197,773 | Up to $281 |
Example - Subsidy amount
You are a member who is eligible under Tier 1, which has a maximum subsidised loan limit of $197,773.
You take out a DHOAS home loan of $250,000, which is an amount greater than the loan limit. This means you will receive the maximum Tier 1 subsidy of $281 per month (as at August 2010).
When you complete a minimum of eight years of service you become eligible under Tier 2.
Given your home loan of $250,000 is not equal to, or greater than, the Tier 2 subsidised loan limit of $296,659, you will not receive the maximum subsidy payable of $422.
Your subsidy will be calculated based on your home loan amount. You will receive a subsidy of $355 (at present).
Member's tier | Loan limit | Loan amount | Greater or less? (Than Loan Limit) | Actual subsidy |
| Tier 1 | $197,773 | $250,000 | Greater | $281 |
| Tier 2 | $296,659 | $250,000 | Less | $355 |
Changes to Subsidy Amounts
Your monthly subsidy payments may fluctuate in line with interest rate changes.
The median interest rate that is used to calculate your monthly subsidy payments can change in line with changes in home lending interest rates - up to the capped rate of 8.95%.
This means if interest rates go down, your monthly subsidy will also decrease.
A decrease in the median interest rate results in a reduction in the maximum monthly subsidy values, and in the payments made into members' DHOAS home loans.
If interest rates go up again, so too will your subsidy payment - but the interest rate used can only go up to the capped rate of 8.95%.
Interest rates are NOT capped at the rate they are when you take out your loan. The median interest rate is capped at 8.95% for all DHOAS home loans, regardless of when they've been drawn down.
Changes to Subsidised Loan Limits
Subsidised loan limits are reviewed at the end of each financial year, as required under the DHOAS Act, and amendments are made to the limit amounts based on changes to the Average House Price.
The subsidised loan limits for 2010-11 are used to calculate your DHOAS subsidy if your first payment period is from or after 1 July 2010. They do not apply to subsidies that were first paid in July 2010 but covered the payment periods of May or June 2010. In this case, your subsidy is calculated on 2009-10 Subsidised Loan Limits.
Changes to the loan limits do not affect your subsidy assistance if your DHOAS home loan is already established and you're currently in receipt of subsidy payments.
The reason for this is that while the value of the house that you are buying may increase, the principal value of your loan will not.
The subsidised loan limits and the balance of your home loan, which are current in the month that your first subsidy payment covers, will remain applicable throughout the life of that home loan for the purpose of working out your DHOAS subsidy payments.
This applies unless you stop then restart your DHOAS assistance related to that home loan. In this case, the subsidised loan limits and home loan balance that are current at the time you restart your DHOAS subsidy payments will apply to determine your subsidy, not your original draw down loan amount or previous years' loan limits. This may result in receiving a smaller subsidy payment than you did prior to the halt in DHOAS.
Lump sum
Some members may opt to convert their accrued DHOAS entitlement into a lump sum. The conditions for accessing the lump sum are that:
- You have accrued entitlement that you can convert into a lump sum payment. That is, you have completed your qualifying period of four years and in addition, you have completed further service to gain a Service Credit. Please note you can use any extra entitlement you have accrued from warlike service to convert into a lump sum.
- You must retain sufficient service credit to support on-going monthly DHOAS subsidy payments.
- You have not previously owned a home, either to live in or for an investment, whilst in the ADF. (You can own an interest in non-residential property).
- The lump sum will not be paid on a residential property bought before a person is given the Subsidy Certificate that is the basis for the lump sum request. This prevents a person getting the lump sum where they have only owned the one property, but bought it some time previously.
- You (and/or your family) need to live in the home for at least 12 months from the time you access the lump sum.
- There is a reasonable expectation you will continue to serve for at least another 12 months
You can only convert a maximum of four years, or 48 months, of service credits into a lump sum.
For the purpose of calculating the lump sum, the Tier 1 subsidy amount is used (even if you're entitled under a higher subsidy tier). This reflects the purpose of the incentive to purchase a first home while your in service.
For example, you are a Permanent member who has eight years of service. Subtracting your four year qualifying period, you have four years of accrued entitlement. You can convert all or some of this into a lump sum payment. It is the equivalent of 48, Tier 1 subsidy payments.
As at August 2010 the maximum Tier 1 subsidy is $281.47 per month. Therefore, if you convert the whole four years of accrued entitlement you would receive $13,510.56 as a lump sum.
Please note: Your lump sum amount will depend on the amount of the Tier 1 subsidy value at the time DVA calculates your payment, after your Home Loan Provider advises DVA that you have drawn down your loan. If interest rates have decreased, the amount of the payable lump sum will be reduced. The sum will also be affected if there is a change to the Subsidised Loan Limits (hence, a change to the maximum Tier 1 subsidy payable), following the annual mid-year review of the average housing price on which the limits are based.
Payment of lump sum
Please note the lump sum is not paid to you before or on settlement of your property, and cannot be used as a deposit to purchase your house.
You will receive your lump sum and your first DHOAS subsidy after your home loan provider advises DVA that you have drawn down your loan and we process your payment.
Payments are made at the start of each month, and cover the month prior.
For example, if you draw down your loan in August, you will receive your lump sum and first subsidy payment in early October. This will be for the month of September. DVA will send you a letter informing you of the subsidy arrangements.
Your monthly subsidy payments and the lump sum
After payment of your lump sum, the remainder of your accrued entitlement is paid to you in monthly subsidies, into your DHOAS home loan. These monthly subsidy payments are calculated using your eligible Tier level (which maybe higher than Tier 1).
The years of entitlement that you convert into a lump sum are counted towards your total accrued entitlement period for DHOAS of up to 20 or 25 years (depending on warlike service).
For example, if your maximum accrued entitlement to DHOAS is 20 years (after you've subtracted your qualifying period), you can convert four years into a lump sum and then receive a monthly subsidy for 16 years (into a DHOAS home loan).
Exemption from Effective Service Requirement
Permanent Members who do not complete effective service for the purposes of their DHOAS eligibility and entitlement, may apply to the relevant DGPERS for an exemption based on exceptional circumstances.
In general, "exceptional" circumstances would not include, for example, maternity leave or study leave.
Members are advised to discuss a request for an exemption with their chain of command before submitting a request.
Postal addresses for DGPERS
DGNPT Director General Navy Personnel and Training: R8-1-016, Russell Drive, Canberra, ACT 2600
DGPERS Director General Personnel - Army: R8-9-025, Russell Drive, Canberra, ACT 2600
DGPERS Director General Personnel - Air Force: R8-0-019, Russell Drive, Canberra, ACT 2600
Qualifying Period and Transfering to the Reserves
A transfer from the Permanent ADF to the Reserves will be relevant to your DHOAS eligibility if you are still completing your qualifying period. That is, four years continuous service in the Permanent ADF or eight years continuous effective service in the Reserves.
Any time you've completed in the Permanent ADF will be doubled if you're counting the service towards the eight year Reserve qualifying period.
For example, if you have completed three years permanent service and then transferred to the Reserves, your completed effective service will be six years (towards your eight year qualifying period as a Reserve).
If you have passed your qualifying period then there is no effect, as after the qualifying period your service accrues at the same rate regardless of whether undertaking Permanent or Reserve service (one year of effective service equals one year of entitlement).
IMPORTANT: Avoid Being Deemed Separated
For the purpose of DHOAS, Reserve service is completed in financial years whereas Permanent service is completed in calender years. "Effective" Reserve service requires at least 20 days of Reserve service within a financial year.
If you have already applied for DHOAS and you're currently receiving a monthly subsidy, you need to ensure that you complete at least one day of Reserve service within the financial year that you leave the Permanent Force, to maintain your DHOAS entitlement. For example, if you leave the Permanent Force in August 2010, you will need to do some Reserve service before 30 June 2011.
This is to establish your status as a Reservist and to ensure you're recognised as a serving member for the remainder of the financial year after you leave the Permanent ADF. This applies to all Reservists, regardless of whether you're in the Standby, High Readiness or other type of Reserves.
Otherwise, for the purpose of DHOAS, you will be deemed to be separated from the ADF. Your status as a serving member will not be able to be reinstated until the following financial year, after you have completed at least 20 days of Reserve service within that year. This could impact on your DHOAS entitlements.
Separated members receive their DHOAS subsidy payments at the Tier 1 level if they have not completed 20 or more years of service at the time of separation. This is even if they were eligible to receive their subsidy at the Tier 2 or 3 level prior to separating.
Therefore, if you're deemed separated from the ADF because you have not established your status as a Reservist, your subsidy payments could be reduced (until such time as you complete effective Reserve service).