Section 52C — Veterans' Entitlements Act 1986: Effect of charge or encumbrance on value of assets

(1) Where there is a charge or encumbrance over particular assets of the person, the value of the assets, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 3 and sections 52G, 52H, 52JA, 52JB, 52JC and 52JD), is to be reduced by the value of that charge or encumbrance. Note: This section does not apply to an asset to which section 52CA (primary production assets) applies. (1A) Subsection (1) does not apply to a charge that arises under section 52ZF. Note: See subsection (5) for a charge that arises under section 52ZF. (2) Subsection (1) does not apply to a charge or encumbrance over an asset of a person to the extent that: (a) the charge or encumbrance is a collateral security; or (b) the charge or encumbrance was given for the benefit of a person other than the person or the person’s partner. (3) Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 52. Exception for an asset-tested income stream (long-term) (3A) Subsection (1) does not apply to an asset that is an asset-tested income stream (long-term). (3B) Subsection (1) does not apply to an asset that is a partially asset-test exempt income stream (within the meaning of section 52). (3C) Subsection (1) does not apply to an asset that is an asset-tested income stream (lifetime). (4) Where: (a) there is a charge or encumbrance over assets; and (b) the charge does not arise under section 52ZF; and (c) the assets consist of assets whose value is to be disregarded under section 52 and other assets; the amount to be deducted under subsection (1) is: (5) If: (a) a person is or was participating in the home equity access scheme; and (b) either: (i) the person’s real assets are subject to a charge under section 52ZF; or (ii) if the person is a member of a couple—the couple’s real assets are subject to a charge under section 52ZF; then the value of those real assets, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 3 and sections 52G, 52H, 52JA, 52JB, 52JC and 52JD), is to be reduced by the amount of the debt owed by the person under section 52ZC because of that participation. Note: If there are other charges or encumbrances over any of those real assets, there may be a further reduction under subsection (1) in the value of those assets. (6) This section has effect subject to sections 52KA to 52X (special residences).