10. Employment and Income

Prime:
Demonstrate 12 months of continuous employment with no more than 2 employers.

Near Prime:
Either employed by their current employer for at least 3 months or demonstrate 12 months of continuous employment, no more than 2 employers.

All Other Products:
Either employed by their current employer for at least 3 months or demonstrate 12 months of continuous employment.

Prime:
2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

If less than 3 months in current role, one of the following to confirm 12 months of continuous employment and no more than 2 employers:

Income Statement/ Tax return

Related employer – where the borrower is related to the employer, we would require the most recent tax return and NOA in addition to payslips and salary credits.

All other products:
2  recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

If less than 3 months in current role, one of the following to confirm 12 months continuous employment:

Income Statement/ Tax return

Calculation:
Base income calculated over 52 weeks

100%

Prime:
At least 6 months with current employer

All Other Products:
At least 3 months with current employer

All Products:
2 most recent payslips at least one dated within the last 4 weeks of submission showing a valid ABN

100%

Prime:
Max 2 employers in 12 months. No gap in employment.

All Other Products:
Demonstrate 12 months of continuous employment within the same industry.

All Products:
2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN
Plus,
Any of the following:
Income Statement
Evidence of previous contracts
Tax returns

Calculation:
YTD Annualised over 48 weeks, compared to previous years earnings

100%

All Products:
Min of 6 months with current employer. Must demonstrate 12 months of continuous employment. No gap in employment

All products:

2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

One of the following to confirm 12 months employment:

Income Statement/ Tax return

One of the following to confirm 6 months with current employer

Payslip July – Dec – Income Statement/ Tax return 

Payslip Jan – June – YTD on payslip

Calculation: 

Jan – June: YTD Annualised over 48 weeks.

July – Dec: YTD Annualised over 48 weeks, compared to previous years earnings

100%

Prime:

80% for all industry types 

100% if a condition of employment

All Other Products: 

100% if regular 6 mths

• Overtime will not be used if the borrower has been stood down for any period of time

Prime:

80%
2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

AND

If Payslip dated July to Dec – Income Statement or most recent Tax return with NOA to be provided.

If Payslip dated Jan to June – YTD on payslip with 6 months income

100%
2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

AND

If Payslip dated July to Dec – Income Statement or most recent Tax return with NOA to be provided.

If Payslip dated Jan to June – YTD on payslip with 6 months income.

If using 100%, then Contract/Letter of employment is required, confirming overtime/shift allowance is a condition of employment.

Contract/Letter of employment is not required if income is earned from the following professions within essential services or road transport services: 

• Healthcare Doctors and Nurses
• Police, Fire and Rescue
• Paramedic and Ambulance
• Defence personnel (Australia Defence Force)
• Corrective services (Prison officer, Parole officer)
• Bus and Taxi drivers

All Other Products:

2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

AND

Payslip July to Dec – Income Statement/ Tax return with NOAPayslip Jan to June – YTD on payslip with 6 months income.

Calculation:

Base hours and rate calculated multiplied by number of pay cycles in the year (weekly x 52, fortnightly x 26, monthly x 12).

YTD including base pay, regular overtime and regular allowances annualised.

Lowest of YTD Annualised or previous year printed Income Statement or Individual Tax Return used for servicing (if already required for verification).

Prime:
80% for all industry types
100% if a condition of employment

All Other Products:
100% if regular 6 mths

Prime:

100% if evidenced in last 2 years.

All Other Products: 

100% if evidenced in last 12 mths.

Prime:

2 years most recent Tax Returns or Income Statement plus

Min one payslip showing bonus/commission payment 

All Other Products: 

1 year most recent tax Returns or Income Statement plus

Min one payslip showing bonus/commission payment 

Calculation Prime:

Latest year used if the lowest figureOrAverage of the last 2 years 

All Other Products: 

Lower of:YTD annualised from most recent payslip

Or

Tax return/Income Statement

100%

Prime / Near Prime

If income upon return to work is required for servicing, this must be mitigated with evidence of sufficient savings to cover any servicing shortfall until the return date (maximum shortfall of 6 months).

Specialist / Specialist Plus

No gaps/shortfall of income before returning to work.

All products:

• 2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN
• Most recent Centrelink statement with matching income credits to personal bank statement(s).
• Letter from employer confirming parental leave arrangement including return to work date, status and salary. 

Underwriters to confirm expenses as declared are accurate in reflecting costs associated with childcare/daycare and adjust where necessary.

Calculation:

Annualised, depending on income type.

100%

All Products:
100% if consistent across all payslips and not confirmed as voluntary. 

2 recent payslips, at least one most recent dated within 4 weeks of submission showing a valid ABN

Explanation and confirmation if deduction is voluntary.

Calculation:
Car allowance – 100% accepted on all products, added to gross taxable income

Non-voluntary deductions – 100% removed from calculated base income*

HELP debts/study loans – to be calculated using the appropriate Aus Gov Study assist threshold according to verified gross income figure and added as a liability. Required to be included in assessment if HELP repayments are evident on payslip, or debt has been disclosed on app form/submission.

Salary sacrifice – 100% added as Other income, with tax not applied

Fringe benefit – 100% added as Other income, with tax not applied

Fully maintained car ($5,000 per annum max) – Pre & Post tax deductions indicated on payslips used as follows:

Base income – pre-tax deduction = gross income (annualised)
Post-tax deduction captured as monthly liability.

100% (unless deduction confirmed as voluntary)

Prime:
ABN 24 mths. GST 12mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 6 mths. GST 1 day.

All Products
*GST registration not required if borrowers turn over less than $75K

Wages paid to themselves:

Where borrower is a shareholder/director and pays themselves a salary income

• Evidence 6 months credits/6mths YTD/NoA/mygov portal, plus Accountants’ letter to state has sufficient profits to meet its business commitments and has been trading profitably for the last 12 months

Director Fees
All Products:
Must be noted in Tax Returns

ABN length

Business continuation acceptable (if changing from Sole trader/Partnership to Company/Trust etc)

Company ownership:

Considered as self-employed if the applicant holds at least 25% of issued capital (share ownership)

Prime:

2 yrs tax returns & Notice of Assessment

Calculation:

Average of the 2 years tax return to be used for servicing or latest year if lower.

Taxed income = Net Taxable Income + directors fee

Untaxed income = Addbacks at 50% or less of the net taxable income + director fee

If there is a significant increase in income, between tax years, underwriters can use the following method:

Previous year (net taxable income + directors fees + addbacks (50% or less than net taxable income + director fee)) x 120%

All Other Products:

1 yrs tax returns & Notice of Assessment

If 2 years tax returns have been provided, latest year can be used in isolation 

Calculation 

Taxed income = Net Taxable Income + directors feeUntaxed income = Addbacks at 50% or less of the net taxable income + director fee

Lodgement date requirements (for income source):

As per ATO guidelines;

Individual tax returns cutoff for previous year – 31st October Company/Trust tax returns cutoff for previous year – 31st March

Add Backs: Depreciation & Interest

Prime:

2 years tax returns and Notice of assessment 

Calculation:

Average of the 2 years tax return to be used for servicing or latest year if lower.

Deprecation & interest addback to be 50% or less of the net taxable income + directors fee for each year.

If there is a significant increase in income, between tax years, the following can be used for servicing:: 

Previous year (net taxable income + directors fees + addbacks calculated) x 120%

All Other Products:

1 years tax returns and Notice of assessment 

Calculation:

Deprecation & interest addback to be 50% or less of the net taxable income + directors fee for latest year 

Latest year net taxable income + directors fees + addbacks calculated

Directors Fees:

Prime:

2 years tax returns and Notice of assessment 

Calculation:

Average of the 2 years tax return to be used for servicing or latest year if lower.

If there is a significant difference between tax years, the following can be used for servicing:: 

Previous years directors fees x 120% 

All Other Products:

1 years tax returns and Notice of assessment 

Calculation: 

Directors fees as per tax return provided

Add Backs:

-Only to be applied to companies that are trading profitably.

-Max of 50% of the total net taxable income to be used (directors fees can be added)

Superannuation above 10.5% can be added back if required.

100% of Jobkeeper and Government assistance (not including Cash Boost) payments can  be included in net taxable income calculation if the latest financial year shows income equal to or greater than the year the government payment was received.

Prime:
ABN 24 mths. GST 12mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 6 mths. GST 1 day.

*GST registration not required if borrowers turn over less than $75K

Company ownership:

Considered as self-employed if the applicant holds at least 25% of issued capital (share ownership)

All Products: 

• 6 months Business Bank Statements OR
• 6 months BAS OR
• Accountants Letter

100%

Prime:
ABN registered for 24 mths and GST registered for 12 mths

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 6 mths. GST 1 day.

*GST registration is not required if borrowers turn over less than $75K.

If not registered for GST, BAS cannot be lodged and will not be an option for self-certified verification.

All Products:

6 months BAS statements, most recent lodged to be provided.Evidence of lodgement via BAS from ATO (Australian Tax Office) website portal.

Declared Income Figure from borrower.Figure used in servicing cannot be higher than declared income.

Standard cut-off dates apply for BAS lodgement as per ATO link. Accountant cut off dates permitted if up to date business bank statements are also provided and inline with income assessed for servicing.

Calculation:

Use our BAS Calculator

Calculated figure compared to declared income and business bank statements.

Corresponding bank statements required to evidence wages on BAS paid to applicant(s).

100%

Prime:
ABN 24 mths. GST 12 mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 6 mths. GST 1 day.

*GST registration not required if borrowers turn over less than $75K

All Products:
6 months business bank statements

Statements are required to be in the name of the earning entity and dated within 30 days of application date.

Calculation:
Total Sales and Expenses are observed for the period of the Business Bank statements.

Adjustments/discretion applied when calculating Net Ratio percentage used in comparison to the industry that they work in, internal transfers compared with expectations for industry/profession.

Total Sales are annualised and compared to declared figure, with figure used for servicing to be lower or equal to declared.

100%

Prime: 

Acceptable.

Near Prime

Specialist/Specialist+:
(where ABN is at least 12 months)

Acceptable.

All Products:

Accountants Letter & Customer declaration form 

• Completed by the applicants’ current accountant, registered with the Tax Practitioners Board, who has already completed previous accounts for the business.(min 1 financial year)
• All sections must be completed in full
• Letters cannot be amended after submission. Any errors will require using an alternative verification method
• The accountants contact details must be available via independent search
• A clear reason for using this form of verification must be provided and deemed acceptable
• Confirmation the accountant completed the declaration must be verbally confirmed via an outbound call by Bluestone and email of the accountant’s declaration sent to the accountant for their information, if the following apply:
  • Income declared >$250,000 (profit plus directors wage)
  • Loan size or aggregate lending >$1,500,000 
• The ABN must match the applicants declared income source
• The company name must match the declared ABN
• Income declared in the customer declaration must match the declaration on the accountants letter (for self-employed income only). The lower of the two will be used if any discrepancy, and only if explainable by accountant and applicant
• Borrower-based policy exceptions won’t be permitted on any accountants letter applications

100%

All products

Acceptable:
Residential

Holiday let/AirBnB

Commercial

All products
Existing Investment Property:
1 month statement if the property is rented through a managing agent/real estate. 3 months rental credits on bank statements if private.

Executed rental tenancy agreement PLUS one months rental credits into bank account if < 3 months

Proposed Investment Property:
Real estate agent’s appraisal or Valuation amount if we’re taking as security.

Moving out of existing Owner Occ
In these instances, where our application involves moving out of existing owner occ, to then use as investment, whilst the applicant(s) reside with family/friends, we would condition for a signed tenancy agreement and at least the first rental credit.

Common Debt – Regardless of an applicant(s) share in a property, 100% of the debt must be declared in the application and 100% of the rental income will be considered in servicing (with appropriate shading applied).

Commercial Rent (as per residential verification)

This needs to be for current rental arrangements, where ownership needs to be in applicant name (company or individual). This is to be input as GROSS income, after 80% shade, to be part of taxable income. Any future commercial rent must be evidenced by an executed lease agreement (agency agreement).

Calculation:

Amount multiplied by time period (week, fortnight, month).Annualised figure used and attributed, as per entitlement to income, so that it can be shaded and taxed appropriately.

Negative gearing: acceptable for residential investment loans in individual, company or trust names – rental losses may be offset against other income, for the benefit of reducing taxable income and therefore tax payable.  

Calculation: 

Balance of Investment Loan Limits (or balance) multiplied by the actual rate on the loan. This amount is then offset against taxable income and then taxed overall. AOL will complete this calculation, provided Investment Loans (those with other institutions) are flagged accordingly as interest tax deductible. This calculation will include Bluestone investment loans for the current application if also flagged.

Residential, Holiday Let/AirBnB & Commercial

Shaded at 80%, then appropriately taxed.

Other income permitted, when at least 50% of application income is earned (employment, investment, super).

Prime:
All pensions acceptable

Family: 100%. A & B only, acceptable for children under the age of 13. Evidenced by Centrelink statement showing assessed income.

Parenting Payment acceptable for children under the age of 6

All Other Products:
All pensions acceptable
Family: 100%. A & B only. Evidenced by Centrelink statement showing assessed income.

Parenting Payment acceptable for children under the age of 6

Most recent letter from Centrelink confirming details of income.

Calculation:
Amount multiplied by time period, to obtain annual figure (Centrelink statements are usually fortnightly) and input as Other Income (untaxed). We can’t support using Annual payments.

Earned income verified and used for servicing, will need to be compared to the declared figure on the Centrelink statement with any significant difference noted in the assessment.

For Family Tax Benefits, there are income threshold guidelines available on the Australian Government’s Department of Human Services website for both Part A and Part B. If the income used for servicing is significantly different to the income declared on their Centrelink statement  the following approach should be applied:x,

• Annual figure from Centrelink statement calculated
• Income test for FTB Part A and Part B reviewed on government website to calculate the amount of family tax benefit eligible for based on assessed income verified.
• Lowest figure used for servicing.
• In order to consider a higher FTB income for servicing, an amended Centrelink statement with an accurate declared income reflected will be required.

100%

All Products:
Must be on income stream
– Min monthly

All Products:
Recent statement or letter from fund confirming amount and frequency with corresponding bank account credit for at least one month.

Calculation:
Annualised figure (Gross Income)

100%

Prime:
Applies for payments made to dependent children up to the age of 12.

All other products:
Applies for payments made to dependent children of any age.

Evidence confirming consistent amount being received

Prime

Child Support agreement (CSA) dated within the last 6 months AND at least 3 corresponding credit to a personal bank account. (Full Bank Statement required) 

All other products: 

Child Support agreement (CSA) dated within the last 6 months or private payments to a personal bank account that are consistent over 3 months. (Full Bank Statement required)

Calculation:
Lower of annual figure stated on CSA agreement or annualised credits into account entered as as other (untaxed) income.

100%

Prime:
Not Accepted

All Other Products:
Ongoing until retirement age.

Prime:
n/a

All Other Products:
Confirmation on letterhead,  from insurance company/employer confirming:

• Amount
• ongoing payment until retirement
• At least 1 matching credit to be evidenced on Full bank statements.

100%

All Products:
Must be full time student 25 years or older.

All Products:
Written verification confirming amount.
Matching credits in full bank statement (3 months statements).Calculation:
Annualised figure on confirmation statement.

100%

All Products:
Must be academic.

All products:
Letter from the institution confirming the amount, frequency and duration with at least 1 credit evident on personal Full bank statement(s).

Calculation:
Annualised (Gross) figure on confirmation letter.

100%

All Products:
Earned for a min 12 months

All Products:
Letter from Foster agency e.g. Key Assets confirming length of time as a carer and amount.
At least 1 credit evident in bank statement(s).

Calculation:
Annualised (Gross) figure from letter provided.

100%

Prime:
24 Months evidence

All Other Products:
12 Months evidence

Prime:
2 years tax returns and Notice of assessment
Plus
2 recent payslips & matching salary credits

All Other Products:
1 years tax returns and Notice of assessment
Plus
2 recent payslips & matching salary credits

Calculation:
Latest year used if the lowest figure
Or
Average income over all years provided

100%

Prime:
Earned/held for a min of 24 months

All Other Products:
Earned/held for a min of 12 months

Prime:

Most recent Investment fund statement, share certificate, or dividend notice 

AND

2 Years Tax Returns

All Other Products:

Most recent Investment fund statements, share certificate or dividend notice. 

AND

1 Years Tax Returns

Calculation:

Prime:

Lowest figure used of the following comparison: 

Previous years investment income x 120%

OR

Latest years investment income

All other products:

Investment income as per tax return provided

100% If franked dividends, franked amount entered as gross, franking credits as other (untaxed) income.

Prime:
Not accepted

All other products:
12 months evidence

All other products:
Require 1 year tax returns showing receipt of trust distribution 

Calculation:
Annual figure on tax return used as taxable income

100%

All Products

Prime/All products:

• Boarder Income
• Future Income i.e income projections for upcoming financial year
• Income from illegal activities and gambling
• Foreign Income
• Interest on savings account
• Jobseeker allowance
• Newstart allowance