JobKeeper will no longer be accepted as it ends on 28 March 2021. Lenders will not consider it for serviceability.
What is the JobKeeper Payment?
It is a $130 billion government payment scheme to help business affected by the coronavirus pandemic retain jobs for their employees by paying a minimum of $1,500 per fortnight before tax to eligible employees.
The JobKeeper payment is available from 30 March 2020 and will be available until 27 September 2020.
JobKeeper payment extended
The government has decided to extend the JobKeeper payment by another six months.
The JobKeeper payment was due to end on 27 September 2020, but it has been extended until 28 March 2021.
However, the $1500 will be reduced depending on employment status (part time or full time) and the period of the extension.
|Period of extension||Full time*||Part time*|
|28 September 2020 to 3 January 2021||$1200 per fortnight||$750 per fortnight|
|4 January 2021 to 28 March 2021||$1000 per fortnight||$650 per fortnight|
*Those who are working 20 hours or more a week on average are considered full time, while those who are working fewer than 20 hours a week on average are considered part time.
To be eligible for the JobKeeper payment extension, businesses and not-for-profit organisations have to demonstrate a decline in turnover for the two periods of extension:
- For the first period of 28 September 2020 to 3 January 2021, there is a fall in GST turnover in June quarter 2020 (April, May and June) and September quarter 2020 (July, August and September) compared to the quarters in 2019.
- For the second period of 4 January 2021 to 28 March 2021, there is a fall in GST turnover in June, September and December quarters of 2020 compared to the quarters in 2019.
On 7 August 2020, the Government announced it will move the relevant date of employment from 1 March to 1 July 2020.
With effect from 3 August 2020, the reference date for assessing whether employees are eligible for JobKeeper is 1 July 2020.
This will increase the employee eligibility for the existing scheme and the extension from 28 September 2020.
Will JobKeeper be accepted when applying for a home loan?
There are some lenders who will accept JobKeeper Payments as income.
For JobKeeper to be acceptable income, the following criteria have to be fulfilled:
- A current payslip with evidence of JobKeeper payment and a prior payslip with your previous income.
- A letter from your employer confirming the circumstances of any change in income.
- There must be evidence of your salary being received in your bank account. You must show 3 months of bank statements with salary credits.
- You can borrow up to 80% of the property value. Higher loan to value ratios (LVRs) will be considered on a case by case basis.
Unfortunately, JobKeeper might not be accepted as income for the following borrowers by some lenders:
- Self employed
- First home buyers
- Those who are working in aviation/airlines, hospitality and tourism.
Here are some scenarios of how lenders are accepting JobKeeper payments as income:
|Scenario||Is Jobkeeper payment accepted as income?|
|You are working regular hours and receiving regular salary (i.e. a portion of your income is supplemented by JobKeeper payment).||Yes, lenders will accept it as it indicates that the employer/business is still operating. Furthermore, lenders will ask how the business will continue to operate.|
|You are working regular hours, but you are receiving higher salary (i.e. regular salary was less than $1500 per fortnight).||No, JobKeeper is not accepted. However, your regular income will be accepted. Your income will be validated through payslips or a letter from your employer.|
|You are working less than your regular hours (or not working any hours since business is not operating) but receiving JobKeeper payments.||No, JobKeeper payment cannot be used as income during application.|
Call our mortgage brokers on 1300 889 743 or get a free assessment to find out if you are eligible.
What additional information do banks need?
Banks and non-bank lenders will also ask the following questions to understand your situation:
- Are you currently working in your usual capacity with the same hours? Or have your hours been reduced?
- Will there be any changes to your working hours?
- If your usual working arrangement has been reduced, are you receiving a salary from your employer? (This includes JobKeeper payments)
- Is the JobKeeper payment an increase to your usual income?
What if my salary has been reduced?
Lenders who are accepting JobKeeper payments will only consider the lower of your current salary or your previous salary when calculating your borrowing power.
This is because responsible lending obligations still apply, and a lender must be able to show that you can afford a new loan without hardship.
What if I am not a full time permanent employee?
The following employment types are acceptable:
- Full time
- Part time
The following employment types are considered on a case by case basis:
You can call our mortgage brokers on 1300 889 743 or submit an online enquiry and we’ll contact you to discuss your eligibility.
What if I am receiving bonuses, commission or overtime?
Several of our lenders will accept additional income such as overtime, commission or bonus income however if you are receiving the JobKeeper payment then this assessed on a case by case basis.
Can I get an investment loan?
Lenders have not yet confirmed if investment property loans are available for people receiving JobKeeper.
We’re expecting refinances of investment loans to be acceptable and purchases to be on a case by case basis.
Are LVR restictions likely?
The lenders that can consider approving a home loan for people receiving JobKeeper payments have a range of policies regarding the conditions and the maximum loan amount.
As of today, some lenders will consider up to 95% LVR, which is 95% of the value of the property that you are buying or refinancing. Other lenders will consider a maximum of 70% LVR.
We believe it is possible that lenders will drop their maximum LVR to 80% soon.
Are many lenders available?
Currently the majority of our lenders will decline your application if you are receiving JobKeeper payments.
Many major lenders such as ANZ, NAB and CBA have confirmed they will not accept JobKeeper payments. Our mortgage broking team is currently contacting lenders that do not have a formal policy.
Has COVID-19 had other effects on getting a mortgage?
- Yes, banks and non-bank lenders have tightened their lending policies around unstable income, high LVR loans, rent income or anything outside their lending criteria. However, you can still get approved for a home loan during COVID-19.
- Lenders take time to assess your loan application, with a major bank taking up to 20 days.
- If you already have a home loan, then there are mortgage relief options to help you manage your repayments.
- Furthermore, banks and non-bank lenders are offering extremely low fixed interest rates and you could refinance your home loan to take advantage of the low rates.
Do you need help to get approved?
Our mortgage brokers are up-to-date with the lending criteria of over 40 lenders.
They know how banks will assess your income because of the changes in lending policy due to COVID-19.
Call us today on 1300 889 743 or get a free assessment.
Who receives the JobKeeper payment?
The payment is made to your employer and they then pay you your salary, or reduced salary, as per normal.
You do not receive the JobKeeper payment as an employee.
Which businesses are eligible for JobKeeper payments?
All businesses, including not-for-profit, can qualify for JobKeeper payment as long as it meets ANY ONE of the following criteria:
- The aggregated turnover of less than $1 billion and estimated GST turnover fell or will fall by 30% or more.
- The aggregated turnover of more than $1 billion and GST turnover fell or will fall by 50% or more.
- Business is not subject to Major Bank Levy.
How will an employee be eligible for JobKeeper Payment?
Your employer will have to nominate you as an eligible candidate/employee to receive the payment.
The eligibility criteria for employees are:
- You are 16 years and older as of 1 March 2020.
- You are an Australian citizen or holder of a permanent visa, Subclass 444 Visa holder as of 1 March 2020.
- You are a resident of Australia for tax purposes as of 1 March 2020.
- You are employed with an eligible employer (even those who are stood down or re-hired are accepted).
- You are working full time or part time, or a casual employee for longer than 12 months as of 1 March 2020.
- You are a permanent employee of an eligible employer. If you’re a long-term casual employee, you cannot be a permanent employee for another employer.
- You have not received JobKeeper payments from another employer.
What if I’m self employed? Can I get JobKeeper payment?
Yes, you can receive it even if you’re self employed if you meet the following criteria:
- You are 16 years old or above.
- You are an Australian citizen or holder of permanent visa or subclass 444 visa.
- The estimated GST turnover has or will fall by 30% or more.
- You have an active ABN on or before 12 March 2020.
- You are actively engaged in the business.
- You are not a permanent employee of another business.
- You have not been entitled to another JobKeeper payment.
- For partnership business, only one partner can be nominated to receive payment.
- Only one company director can be nominated to get the payment.
What if I’m earning more than $1500 and get a JobKeeper payment?
Your income is not reduced if you’re earning more than $1500 per fortnight before tax and receiving JobKeeper payment unless your employer has done this separately to JobKeeper.
You will still get your regular income. The JobKeeper payment will assist your employer to continue their business by subsiding a part of your income.
However, when assessing your loan application, the lender will take the lower of the two incomes.
What if I earn less than $1500? How much will I receive?
If you receive less than $1500 per fortnight per income, your employer must still pay you the minimum $1500 per fortnight before tax.
You will get your income with a “top-up” so you receive $1500 per fortnight before tax.
Again, the lower of the two incomes will be assessed during loan application.