Peter Costello

Media Releases

Victoria not Entitled to Pay First Home Owners Scheme Grants to Toddlers

NO.088

VICTORIA NOT ENTITLED TO PAY FIRST HOME OWNERS SCHEME GRANTS TO TODDLERS

Clear guidelines exist for the administration of the First Home Owners Scheme (FHOS) which was agreed to by all States and Territories when they signed the Intergovernmental Agreement on the Reform of Commonwealth State Financial Relations in 1999.

Recipients must be Australian citizens or permanent residents, they must be buying or building their first home, and the home must be intended to be a principal place of residence. Under this agreement, State and Territory governments were also required to enact legislation to prevent abuse of the FHOS.

Today’s Herald Sun reports that the Victorian Government has paid out FHOS grants to 38 toddlers.

Toddlers do not buy or build houses. Toddlers do not move into a principal place of residence.

Victorian Treasurer, Mr John Brumby, has conceded that parents who are ineligible for the grant because they already own a home, have made an application in the name of their infant children.

This is an abuse of the FHOS. The Victorian Government must now amend its legislation which has apparently allowed this. Victoria is in breach of its obligation to prevent abuse of the scheme.

State Governments are entitled to claim the value of all FHOS grants from the Australian Government. If the Victorian Government has claimed reimbursement for these grants to toddlers, than it will be required to repay that sum to the Australian Government.

In addition, I will be writing to every State Premier and Territory Chief Minister, seeking an assurance that they have put in place arrangements as per the principles they agreed to in the Intergovernmental Agreement, to prevent abuse of the FHOS.

14 October 2003
CANBERRA

Contact: David Alexander
02 6277 7340


Extract from the Intergovernmental Agreement on the Reform of Commonwealth State Financial Relations

D1. The States and Territories will make legislative provision for the First Home Owners Scheme (FHOS) from 1 July 2000 which will incorporate programme criteria consistent with the following principles:

[…]

  1. Eligible applicants must be natural persons who are Australian citizens or permanent residents who are buying or building their first home in Australia.

    […]

  1. An eligible home must be intended to be a principal place of residence and occupied within a reasonable period.

    […]

  1. The relevant State and Territory legislation will contain adequate administrative review and appeal mechanisms, along with provision to prevent abuse of the FHOS. The States and Territories will cooperate in the exchange of information to identify eligible first home owners.

14 Oct 2003

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