A disability pension is a valid income source for the purpose of making a loan application with many banks. As with any loan application the amount of income from a disability pension, or from any other source, factors into the amount you can borrow and affects eventual the terms of the loan. These loans, however, are generally considered risky so often carry a slightly higher rate.
This page includes general guidance only; one of our brokers should be consulted for more accurate and up-to-date information.
Family Tax Benefit
Family Tax Benefits (FTB) Part A and B are accepted by a number of lenders. The Large Family Supplement, an extension of the FTB, is accepted by some lenders.
- The age of children matters. Fewer lenders will accept your application if your children are older the age of 11 years old although there are a couple of lenders that will accept 100% of your FTB your application regardless of your children’s age.
- You will need to provide your most recent Centrelink statement – this includes all pages, including blank pages. You can usually download your most recent statement from the Department of Human Services website.
- Certain family-related benefits will not be accepted. Rent assistance, parenting payments and the pharmaceuticals allowance are not acceptable. This is because they are to be used for a specific purpose (such as medicine) or will not be received if you buy a home (such as rent assistance).
Child Support & Maintenance
Many lenders will consider child support income and maintenance payments when assessing your suitability for a home loan. You’ll have to let us know if support payments are made via the Child Support Agency (CSA), whether payments are court ordered, and if you’ve received payments in the last 6 months – all of these factors determine what product or lender is most suitable.
Keep in mind that you may also be required to supply the following supporting documentation.
- A copy of the Family Law Court Order.
- Bank statements showing credits to your account.
- A letter from your solicitor.
- A letter from the Child Support Agency (CSA).
Pension: Veterans and Widows
Service, age or widow pensions may be accepted as extra income by some lenders. The bank’s main requirement is that you can show proof that you can meet your mortgage obligations for the foreseeable future.
- Only certain types of veteran pensions are accepted. The ‘Department of Veteran Affairs – Service and Age Pension’ and the ‘Department of Veteran Affairs – War Widow’s or Widower’s Pension’ are both acceptable veteran pension types. Other pension types may be acceptable if they’re considered to be permanent and ongoing.
- Supporting documents will be required. You’ll need to provide a current Department of Veterans Affairs statement that shows your name and the frequency and amount of your pension payments, as well as a current bank statement showing direct credits identifiable as the government allowance.
Benefits as a Secondary Income
Banks will often require that you have a primary job, and they’ll consider your benefits as a secondary income, although this isn’t always the case.
Benefits Not Accepted
Generally speaking banks will accepts Family Tax Benefits, Large Family Supplements, Child Support/Maintenance or a Veterans & Widows Pension. Unfortunately, the following banks are unsuitable as as an income source.
- Carer’s Allowance / Payment.
- Disability Support Pension (exceptions may be made with one of our lenders if you have been receiving payments for at least 5 years from the date of your home loan application).
- Foster Care Allowance.
- Any other type of Centrelink benefit.
You may be able to use income protection payments as well as worker compensation payments.
We’d like to guide you through the process; call us on 02 6188 4555 for a discussion with one of our brokers.