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Wednesday, 19 November 1986
Page: 2465

Senator VIGOR(11.26) —I have had information from bank officers that some applicants for grants under the first home owners scheme have entered into a number of contrived arrangements for one year to qualify for benefits or have had substantial net assets which are able to be screened from the Department of Housing and Construction but which in any case the Department seems prepared to ignore. A number of qualifications must be met for an applicant to receive the subsidy available under the first home owners scheme.

The most important test is that of taxable income. The income test applies to the combined income of the person or persons applying. Full benefits are payable up to a combined income of $20,000 with a shade-out provision which reaches up to $27,900 per annum, after which no benefit is payable. Payments under the scheme are made on a monthly basis over five years, which amount to $4,000 for people with no dependent children, $5,500 if there is one dependent child and $6,000 if there are two dependent children. I have received complaints from bank officers processing loans whose applicants are receiving the first home owners grant. Some applicants are able legally to show only $20,000 of joint taxable income by holding excess earnings in trust accounts, in business names or by other such devices.

For applicants to receive bank loans they must complete statutory declarations showing all income, assets and liabilities. It is common apparently to receive applications showing net assets of $150,000 or more. Once the first home owners loan has been approved there is no reassessment of income so people are not forced to rig their earnings for more than one year. The bank officers who approached me thought that it was quite wrong for wealthy people to get this assistance, thus denying funds to the needy. There is a case to include some type of net assets or associated income test which would bring this benefit into line with some of the other benefits which the Government is putting forward, perhaps for much needier cases.

Is the Government examining ways to cut down on this and other types of cheating to ensure that more of the available funds go to people who really need the assistance? Is it using the powers it has to get hold of the statutory declarations which would give it the ability to pursue the people to recover some money for the taxpayers?