Options to get all in order for householders
Volume 11, No. 46, June 29, 2006 By Graham Howatt
Armed Forces Federation of Australia


RECENT editions of the Service newspapers advertised closure of the $80,000 Defence HomeOwner Scheme (DHOS) – which is currently under contract with the National Australia Bank to the end of 2007 – indicating a number of replacement options were under consideration.

Since that initial advice we are now aware that four options are being explored: an open market subsidy, a tied home loan subsidy, a graduated deposit scheme and an owner occupied allowance (OOA).

The OOA is an initiative that has long been suggested by the Armed Forces Federation and we welcome its inclusion.
It is the Federation’s view that provision of this allowance would provide an ongoing subsidy to members who purchase and occupy their own property, regardless of whether they had utilised the DHOS or not.

While this remains the Federation’s preferred option, we have explored the other options under consideration and believe a combination of options would provide the best outcome for ADF members who wish to purchase and occupy their own homes, rather than occupying a Service Residence (SR) or utilising assistance through Rental Allowance (RA).

The most recent data available (2003) indicates that about 24,500 members were either occupying a SR or in receipt of RA at a subsidy of around $17,000 a year. On the other hand, about 8600 members were living in their own home.

It is unclear how many of the home owner/occupiers were in receipt of the DHOS (an estimated subsidy of $120 a month) or had taken advantage of the upfront assistance of the Home Purchase Assistance Scheme, but it is clearly evident that over the life of a normal posting cycle, homeowner/occupiers enjoy far less financial assistance than their SR or RA counterpart.

That said, and acknowledging the fact it is the member’s choice to purchase and occupy their own home, their overall remuneration package should not be reduced by doing so.

The review under way provides an ideal time to provide an equitable solution regarding accommodation assistance across the board and whatever the outcome the inclusion of an OOA, must be included as part of the mix, if that is to be achieved.

An overview of what is under consideration is available at www.defence.gov.au/dpe/pac.