Home Loans - Centrelink

Home Loans - Centrelink

Home Loans For People On Centrelink  

Are you afraid that getting Centrelink payments will stop you from applying for finance?

At some point in time, we all need some help to boost our financial abilities or bring us back on track if we end up in personal difficulties 

Centrelink Payments can be used as earnings or income and in some cases help you get the type of loan that you are seeking.  Lenders will be seeking additional income from wages or Child Support in addition to your Centrelink Income.  Many Centrelink payments are paid under the poverty line, so lenders will be asking for additional income.  Some Centrelink payments such as Newstart Jobseeker and Austudy will be excluded from loans.

The hard truth is that it can be difficult to get loans for people on Centrelink especially loans that offer competitive interest rates.

Lenders can also quickly judge your credit situation without looking at your entire financial profile.

centrelink loan approval

What types of loans are available If I am On Centrelink?

There are several loan options. Working with a finance broker experienced with Centrelink loans will be able to help you get the best rates

  • Personal loans.  Yes you can apply for personal loans from banks, credit unions or other lenders if you are receiving Centrelink Payments. All applicants need to meet minimum income requirements and be aware that not all Centrelink Payments can be counted as income when applying for finance.  You may need additional employment income for this loan.
  • Payday loans. These are also called Cash Loans. They are short term loans and typically range from several hundred dollars up to $2000.  Not a great idea, high interest, high payments
  • Car loans. Car Finance is definitely a loan you can be approved for and there are lenders that will accept Centrelink applicants and this is one type of lending that we at George Financial Services excel in getting great loans for our clients who are on Centrelink Payments.  Depending upon the loan amount, you may require additional employment income
  • Overdrafts. An overdraft is linked to a bank account and allows users to obtain finance if there is an emergency. Customers who have a good history with their lender may be approved when on Centrelink payments.  It may require your partner to be employed
  • Home Loans. Yes – Home loans are possible when you are on Centrelink Payments. There are minimum requirements that you have to meet and not all payments from Centrelink can be counted as income. This is another type of lending we have a great success rate in helping people achieve a home of their own.  A larger deposit may be required depending upon your income.  Child Support if you are a sole parent, can also be included as income (depends on the lender and child’s age)

Understanding Different Centrelink Payments And If They Count Towards A Loan

Some Centrelink Payments are typically rejected when applying for larger amounts of finance like a car or a home loan.
For example – Youth Allowance is typically not accepted by many lenders as a form of stable income but some lenders will give Payday or Cash Loans if you are on this payment.
When applying for a loan, you need to know what type of of Centrelink benefit you receive. Check your statements or go to your MyGov account to see what you are on

These are the common payments and how lenders will view them for the larger loans like car loans or home loans

  • Age Pension. Provides regular payments for the retired. Many payday lenders accept this as a form of income while banks may require an additional income.
  • Carer’s Allowance. For people who are caring for a dependent person, this allowance provides monetary support. This is generally accepted as a form of income by lenders.
  • Youth Allowance. Young people aged 16 to 24 who are studying, undertaking an apprenticeship, training, looking for work or sick can be eligible for youth allowance. Many lenders do not accept this as a form of income but some lenders will offer Payday or Cash loans
  • Austudy. This is for full-time students and Australian apprentices 25 years or older. It can be difficult to get a loan when receiving this payment.
  • Foster Carer Payments. This is a fortnightly payment intended to help support and pay for carers with a foster child. This can be considered as part of an income but additional income is usually required in addition.
  • Disability Pension. People who have a physical, intellectual or psychiatric condition that stops them from working can be eligible for the Disability Support Pension. While this is generally accepted , you may have to meet extra requirements or show that you have been on this allowance for the long term.
  • Child Support Payments. This is income received to help cover the cost of raising a child or children. It can be assessed income if the applicant can provide a copy of the Family Law Court Order, bank statements proving they receive this income, a letter from a solicitor and a letter from the Child Support Agency (CSA).
  • Family Tax Benefits and Parenting Payments. This is financial support to help cover the costs of raising children. There is more information below about this payment
  • Overseas Pension. For people who receive a pension payment from overseas some lenders may recognise it as income. This is generally if the pension is coming from Austria, Belgium, Canada, Chile, Croatia, Cyprus, Denmark, Finland, Germany, Greece, Ireland, Italy, Japan, Korea Republic, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Slovenia, Spain, Switzerland or the USA. Applicants might be required to show that pension is ongoing for a period of time.


More About Family Tax Benefits And Applying For A Loan

Family Tax Benefits (FTB) Part A and B are accepted by a number of lenders.

However 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.  We do have some lenders who are not restricted by the child’s age.  Contact us to discuss
  • You will need to provide your most recent Centrelink statement.
  • Certain family-related payments are not included as income – such as  Rent Assistance and the Pharmaceuticals Allowance and it 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 When Applying For A Loan

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

When talking to your mortgage brokers you need to inform them if the payments are a private agreement or if the payments are via the Child Support Agency (CSA) and if you’ve been receiving regular payments over the last six months.

Be prepared to have on hand the following documents in order for your application to be assessed:

  • Bank statements showing credits to your account 3 – 6 months
  • A letter from the Child Support Agency (CSA)

In some cases, the other parent may pay more than the minimum payment shown on the CSA Letter.  The lenders will take the lower of the payments.

Loans for Pensioners: Veterans and Widows

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 life of the loan.

If you can show that you have another source of income on top of your pension payments, you will have a more likely chance of securing a loan

You will need Supporting documents: 

You’ll need to provide a current statements 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.  Age will also affect the success of your loan, as well as your financial position.

car loan

How Much Can You Borrow?

If you meet all the criterias where a loan can be approved – This is a simplified way of working out the amount you can 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 at the bottom of our home page to work out how much you can afford.  If the calculator doesn’t provide the figure you need, call us on 0403 211 361 as you may be missing income figures, or we may be able to use another lender

Are You Able To Work? It Will Help You To Get Credit.

The more you can prove to a lender that you are a minimal risk of defaulting on a loan payment – The easier it will be to secure finance

Many lenders will not solely accept Centrelink Payments on their own and they will require additional income and this maybe through either you working or your partner working.
Your partner may need to be a part of the loan application for this to be used.

The Right Finance Broker For You

Would you like to get No Bull advice for experienced Centrelink Loan brokers?

We have helped many single parents and pensioners to achieve the finance that they need for a new car, a home Loan and getting debt consolidation done. Sometimes there will need to be some work done to clean up your credit history and to consolidate existing bad credit – But we know what to do and what lenders to use to get you what you need.

Contact us today for an informal chat to see how we can help you.