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Subsidy lump sum payment

What is the subsidy lump sum payment

You may be able to convert up to a maximum of 48 months of your accrued DHOAS service credits into a subsidy lump sum payment.

A lump sum payment is a one-off payment paid directly onto your DHOAS home loan balance.

When calculating the subsidy lump sum payment, the maximum monthly subsidy for Tier 1 is used, even if you are eligible for a higher subsidy tier level.

As of June 2025, the maximum subsidy lump sum payment amount is $24,720.
(48 months x $515)

If you are eligible, the subsidy lump sum payment is paid alongside your first monthly subsidy payment directly into your DHOAS home loan after it has been drawn down. It cannot be accessed as an upfront payment prior to loan settlement to be used as a deposit to purchase your house.

You apply for the subsidy lump sum payment at the same time you apply for your DHOAS subsidy certificate, using the Application for Subsidy Certificate. You must be able to meet certain eligibility criteria as stipulated in the next section.

 

Subsidy lump sum payment eligibility

If you wish to receive the subsidy lump sum payment, you must be able to agree with BOTH of following statements together to become eligible:

  • Whilst you have been a member of the ADF, neither you, nor you and your partner together, have bought a 50% or greater interest in land in Australia where a house was occupied or could have been occupied as a home by any party.
  • You expect you will continue effective service in the ADF for the purposes of DHOAS for a period of at least 12 months after payment of subsidy is authorised.

If you cannot agree with both statements, you will be ineligible to access the subsidy lump sum payment.

It is important to note that you do not forfeit any accrued service credit entitlement by being ineligible for the lump sum payment. You can still access any accrued entitlement payable as a monthly subsidy towards a DHOAS home loan.  

Below are some common examples that can deem you ineligible for the lump sum:

  • Refinancing an existing home loan where the loan was used to purchase a property whilst you were in the ADF.
  • Buying an investment property whilst you were in the ADF, even if you have never lived in the home.
  • Buying a home before the DHOAS subsidy certificate is issued.
  • Not intending to complete effective Reserve service or will be discharging from the ADF within 12 months after commencing subsidy.
  • Previously receiving Defence Home loan subsidy assistance under the current or a prior Defence home loan scheme.

If you have a DHOAS construction loan, see Construction loan and lump sum for further details.

 

Subsidy lump sum and monthly subsidy payments

After payment of your lump sum, you will continue to receive your entitlement in monthly subsidy payments, paid into your DHOAS home loan. These monthly subsidy payments are calculated using your eligible tier level.

If you are entitled to a tier level higher than Tier 1, you may wish to consider whether it is best for you to convert a portion of your accrued entitlement on receiving the lump sum payment at the Tier 1 level, or expending it on receiving monthly subsidy payments into your DHOAS home loan, at the higher tier level.   

Example

You are a Permanent serving member eligible for Tier 3 with 12 years of service credits. You have requested to convert 48 months (4 years) of this entitlement into a lump sum payment which is calculated at the Tier 1 level. This leaves you with 8 years service credits left over, which will support your ongoing monthly subsidy payments at the Tier 3 level.

 

Retaining enough service credit to support ongoing subsidy payments

When converting service credit entitlement into a subsidy lump sum payment, you need to ensure you retain enough service credits to support ongoing, monthly subsidy payments.

  • Permanent members should retain at least 2 months of service credit to cover any administrative processes.
  • Reservists are advised to consider retaining 12 months or more of service credit, depending on how many months of service credit you need to support subsidy payments before you complete effective service within a financial year.

If you run out of service credits, your subsidy payments will cease, and you will be required to reapply for DHOAS once you have accrued further entitlement. To avoid a disruption to your payments, it is better to convert less of your service credits into a lump sum payment and ensure you have sufficient cover into the future if there will be changes to your service related or personal circumstances.


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