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Mortgage With Centrelink Benefits

Do you receive Centrelink benefits? Not all lenders will accept government benefits as supplementary income when assessing your home loan application.

Generally speaking, if you receive either Family Tax Benefits (FTB) or a veterans pension, you’ll be in a good position to qualify with a number of lenders. Other types of Centrelink benefits are not accepted so read on to find out more.

Which Centrelink benefits are accepted?

Family Tax Benefits

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 following requirements will also apply:

  • Age of children matters: The older your children are, the fewer lenders will accept your FTB income, particularly children over the age of 11 years old. There is one lender that will accept 100% of your FTB income regardless of the age of your children.
  • You will need to provide your most recent Centrelink statement: Please be sure to include all pages, including blank ones. You can often download a 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).

You can go to the Family Tax Benefit Home Loan page to find out more information about qualifying for a home loan and how much you can borrow.

Child support / maintenance

Some lenders will take into account child support income and child maintenance when assessing your income.

When you call our mortgage brokers please let them know whether the child support payments are via the Child Support Agency (CSA), whether the payments are court ordered and if you’ve been receiving regular payments over the last six months.

You may also be required to supply the following documents in order for your application to be assessed:

  • 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 repayments on a regular basis and for the foreseeable future.

Generally speaking:

  • 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: Generally speaking, 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.

You can go to the Veteran Pension Home Loan to find out more information about qualifying for a home loan and how much you can borrow.

How much can you borrow?

If your income type is one that we can accept, here’s how to calculate how much you may be able to borrow:

  1. Look at your most recent Centrelink statement and work out your fortnightly income.
  2. Multiply this by 26 to find your annual tax free income.
  3. Look at your payslips or your co-borrower’s payslips and calculate your annual taxable income.
  4. Use our ‘How much can I borrow?’ calculator to work out how much you can afford.

Why might I also need a job?

Why do banks want me to have a job?

Our lenders will not accept these income types on their own. If you or your co-borrower has a job then they will accept your centrelink income as a secondary income only.

The reason for this is that a small number of people receiving benefits are unemployable, and if they stop receiving benefits they will not be able find a job. It is for this reason they want to see evidence that you are capable of working and that you have a second income source.

Is it okay if I am not working but my partner is?

Yes, as long as your partner is also on your loan application then this is fine. We can use your partner’s salary and your benefits will be included as a tax free secondary income.

Other types of Centrelink benefits aren't accepted

Do you receive anything other than Family Tax Benefits, Large Family Supplements, Child Support/Maintenance or a Veterans & Widows Pension?

Unfortunately, we are unable to help you qualify for a home loan if you receive any of the following Centrelink benefits:

  • Carer’s Allowance / Payment.
  • Disability Support Pension.
  • Foster Care Allowance.
  • Pension: Age.
  • Pension: Overseas.
  • Any other type of Centrelink benefit.

However, you can get a mortgage using income protection payments as well as workers’ compensation payments.

  • Tazewell

    I receive veteran’s benefits so can I use them to get an investment mortgage?

  • Hey Tazewell, yes you can use veteran’s benefits as assessable income for an investment loan. However, almost all lenders will need you to have a strong asset position and clear credit history to qualify.

  • Stang

    What method do banks use to calculate our borrowing power?

  • Hello Stang,

    Most lenders use the same basic formula when calculating your borrowing power:

    Gross income – tax – existing commitments – new commitments – living expenses – buffer = monthly surplus

    Although all lenders use this formula there is a lot of variation in the way that they assess your expenses and some lenders require a buffer, whereas others don’t. You can find out what other factors the lenders assess by checking out the calculating borrowing power page:
    https://www.homeloanexperts.com.au/how-much-can-i-borrow/how-do-banks-calculate-my-borrowing-power/

  • Weigell

    Do banks accept income protection payments?

  • Hi Weigel,

    Yes, there are lenders that can accept income protection payments. Some banks will only accept 50% of these payments but some of our lenders can use 100%. Do nte that applying with the right lender is key as there are lenders that may not approve your mortgage application if the your income protection payments are permanent and ongoing. Please check out this page for more info:
    https://www.homeloanexperts.com.au/unusual-employment-loans/income-protection-payments-mortgage/