will apple replace my faulty power button

I am under contract with Optus (australia), the power button on my iphone 5 (64gb) has started working intemittently. Sometime it does some it doesnt, but i know from experience this will get worse till it cease's to function at all.

I took my phone to optus who wanted to send it off for repair (minimum 3 weeks till it gets looked at) and when i said thats not acceptable the 16yr old member of staff i was dealing with gave me a seat and put me on the phone to optus support! (thanks). She was less helpful and offered to send me a 16gb iphone 5 as a loaner, they would charge me $200 for the pleasure.

I called another optus store and an emplyee told me that the apple shop will swap this phone for me, for a refurbished iphone 5 64gb. I am skeptical because in the past i have thought this is only true if you are uner the 12mth warrenty, of which i am in month 14 (coincidence).

Can anyone shed any light on this.

Thanks

Ian