11. Employment and Income

Age of Documents - documents required for verification can be no older than 30 days (or within two pay cycles if monthly) of the application submission date, except where the information relates to quarterly, bi-annually or annual calculated figures, including BAS, PAYG Summary, Tax Returns or Employment contracts.

Verification Checks

  • ABN Search; must confirm appropriate length or continuation of operation (e.g. sole trader/partnership to company or trust)
  • Company File (current) Search

Job Keeper income evident:

  • PAYG: we remove the standard $1500 per fortnight from income, if any Job Keeper is noted on payslips or highlighted to us on the application. Remaining income to be used in servicing review.
  • Self employed: remove any ATO credits noted on business bank statements. Remaining income to be reviewed as per standard process.

 

(a) PAYG: Full Time
Qualifying Requirements % used in servicing

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 most recent payslips with corresponding salary credits via Full bank statement.

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 borrower is related to employer, we would require the most recent NOA/tax return in addition to payslips/credits.

All other products:
2 most recent payslips with corresponding salary credits via  Full bank statement.

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

Income Statement/ Tax return

Calculation:
Annualised over 52 weeks

100%

(b) PAYG: Part-Time
Qualifying Requirements % used in servicing

Prime:
At least 6 months with current employer

All Other Products:
At least 3 months with current employer

All Products:
2 most recent payslips with corresponding salary credits via Full bank statement.

Payslip from Jan - June - YTD on payslip

Payslip from July - Dec - Income Statement

Calculation:
Annualised over 52 weeks

100%

(c) PAYG: Contract
Qualifying Requirements % used in servicing

Prime:
Max 2 employers in 12 months

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

All Products:
2 most recent payslips and corresponding salary credits via Full bank statement.
Plus,
Any of the following:
Income Statement
Evidence of previous contracts
Tax returns

Calculation:
Income to be calculated over 48 weeks

100%

(d) PAYG: Casual
Qualifying Requirements % used in servicing

All Products:
Min of 6 months with current employer.Must be in the same industry for min of 12 months. No gap in employment

All products:

2 most recent payslips corresponding salary credits via Full bank statement.

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: 

Payslips provided between July - Dec: 

Lowest of YTD annualised, income statement or current base income calc on payslip x 48 weeks

Payslips provided between Jan - June:

Lowest of YTD annualised or current base income calc on payslip x 48 weeks

100%

(e) PAYG: Overtime & Shift Allowance
Qualifying Requirements % used in servicing

Prime:

50% 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:

50%

2 most recent payslips with regular overtime evident and corresponding salary credits via Full bank statement.

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 most recent payslips with regular overtime evident and corresponding salary credits via Full bank statement.

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 most recent payslips with regular overtime evident and corresponding salary credits via Full bank statement.

AND

Payslip July to Dec - Income Statement/ Tax return with NOA

Payslip 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:
50% for all industry types
100% if a condition of employment 

All Other Products:
100% if regular 6 mths

(f) PAYG: Bonuses
Qualifying Requirements % used in servicing

All Products:

80% if the last 2 years evidenced. Must be the same employer.

All Products: 

2 years' most recent Tax Returns or Income Statement plus

Min one payslip showing bonus payment (does not have to be on the most recent payslip(s))

Calculation 

All Products: 

Lower of last 2 years' bonuses used for servicing.

80%

(g) PAYG: Commissions
Qualifying Requirements % used in servicing

Prime:

100% if last 2 years evidenced. 

  • Commission payments to be evident in June 2020 or more recently

All Other Products: 

100% evidenced 12 mths

Commission payments to be evident in June 2020 or more recently

Prime:

2 years most recent Tax Returns or Income Statement plus

Min one payslip showing bonus payment 

All Other Products: 

1 year most recent tax Returns or Income Statement plus

Min one payslip showing bonus payment 

Calculation 

Prime:

Latest year used if the lowest figure

Or

Average of the last 2 years 

All Other Products: 

Lower of:

YTD annualised from most recent payslip

Or

Tax return/Income Statement

100%

(h) PAYG: Parental Leave (maternity leave)
Qualifying Requirements % used in servicing

All Products:
Must have returned to work

All products:

  • Letter from employer confirming back to work status and terms of employment
  • 2 payslips and matching salary credits

Calc:
Annualised depending on income type

100%

(i) PAYG: Payslip Deductions & Non-shift allowances
Qualifying Requirements % used in servicing

All Products:
100% if consistent across all payslips and not confirmed as voluntary (50% for car allowance on Prime)

All Products:
2 most recent consecutive payslips

Explanation and confirmation if deduction is voluntary.

Calculation:
Car allowance - 50% Prime or 100% Other 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)

(j) Self-Employed: Fully Verified
Qualifying Requirements % used in servicing

Prime:
ABN 24 mths. GST 12mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 12 mths. GST 1 day.

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

Prime:
2 yrs tax returns & Notice of Assessment plus 3 months Business Bank Statements or 3 months BAS

All Other Products:
1 yrs tax returns & Notice of Assessment plus 3 months Business Bank Statements or 3 months BAS

Calculation:
Use the latest years income in servicing if up to 20% greater than previous year.

If greater than 20%, use 120% of earlier years income, subject to review of 3 months' BAS or Business Bank Statements.

100%

(k) Self-Employed: Alt
Qualifying Requirements % used in servicing

Prime:
ABN 24 mths. GST 12mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 12 mths. GST 1 day.

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

Prime:
Two of the following:
6 months Business Bank Statements
Plus 6 months BAS

All Other Products:
6 months Business Bank Statements or 6 months BAS

100%

(l) Self-Employed: Alternative Documentation - BAS
Qualifying Requirements % used in servicing

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

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 12 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.

Prime:
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.
PLUS:
6 months Business Bank statements

Figure used in servicing cannot be higher than declared income.

All Other 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.

Calculation:

Download our BAS Calculator (clicking on this link will trigger a direct download)

Calculated figure compared to declared income and business bank statements.

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

100%

(m) Self-Employed: Alternative Documentation - Business Bank Statements
Qualifying Requirements % used in servicing

Prime:
ABN 24 mths. GST 12 mths.

Near Prime:
ABN 12 mths. GST 1 day

Specialist/Specialist:
ABN 12 mths. GST 1 day.

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

Prime:
6 months business bank statements plus 6 months BAS

All Other 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 are observed for the period of the BAS

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%

(n) Other Income: Rental
Qualifying Requirements % used in servicing

All products
Max 50% of income for servicing from rental sources

Acceptable:
Residential

Holiday let/AirBnB

Commercial

Residential
Existing Investment Property:
Bank statements showing 3 months of identifiable rental credits (Full Bank Statements required)
or 3 months managing agent statements

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.

Vacancy rates to be checked as suitable for high risk locations (i.e. CBDs) and in tight servicing applications.

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.

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 50% 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 only in individual names (not company or trust) - 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 4.29% (this figure will be amended quarterly or when rates change). This amount is then offset against taxable income and then taxed overall. Bluestone servicing calculator will complete this automatically.

Residential
Shaded at 80%, then appropriately taxed.

Holiday Let/AirBnB & Commercial

Shaded at 50%, then appropriately taxed.

(o) Other Income: Pensions and Government Benefits
Qualifying Requirements % used in servicing

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 up to the age of 12. Evidenced by Centrelink statement showing assessed income.

Parenting Payment acceptable up to age 5

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

Parenting Payment acceptable up to age  5

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%

(p) Other Income: Superannuation
Qualifying Requirements % used in servicing

All Products:
Must be on annuity 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%

(q) Other Income: Child Maintenance
Qualifying Requirements % used in servicing

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 at least 3 corresponding credit to a personal bank account. (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%

(r) Other Income: Income Protection and Workers Compensation
Qualifying Requirements % used in servicing

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%

(s) Other Income: Austudy
Qualifying Requirements % used in servicing

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%

(t) Other Income: Scholarship
Qualifying Requirements % used in servicing

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%

(u) Other Income: Foster Carer
Qualifying Requirements % used in servicing

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%

(v) Other Income: Seasonal
Qualifying Requirements % used in servicing

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%

(w) Income: Add Backs - Depreciation & Interest
Qualifying Requirements % used in servicing

Prime/Near Prime:
24 Months ABN

All Other Products:
12 Months ABN

  • Only to be applied to companies that are trading profitably.
  • Max of 50% of the total profit to be used. (Directors wages can be added)

Prime:
2 years tax returns and Notice of assessment
Plus 6 months business bank statements

All Other Products:
1 years tax returns and Notice of assessment
Plus 6 months business bank statements

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

Max 50% of Profit

(x) Other Income: Directors Fees
Qualifying Requirements % used in servicing

All Products:
Must be noted in Tax Returns

Prime:
2 years tax returns and notice of assessment

All Other Products:
1 years tax returns and notice of assessment

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

All other products;
Figure, as per tax returns

100%

(y) Other Income: Investment (Interest and Dividends)
Qualifying Requirements % used in servicing

Prime/Near 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 - including FY20

All Other Products:
Most recent Investment fund statements, share certificate or dividend notice.
AND
1 Years Tax Returns - must be FY20

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

All other products:
Tax return figure

100%

(z) Other Income: Trust Distributions
Qualifying Requirements % used in servicing

Prime:
Not accepted

All other products:
12 months evidence

All other products:
Require 1 year tax returns showing receipt of trust distribution - FY20 tax returns must be provided.

Calculation:
Annual figure on tax return used as taxable income

100%

(aa) Unacceptable Income
Qualifying Requirements

All Products

Prime/All products:

Unverified Cash
Boarder Income
Future Income i.e income projections for upcoming financial year
Income from illegal activities and gambling
Foreign Income
Interest on savings accounts

(ab) Acceptable Industry

All Products: 

We can accept income for both PAYG and self-employed where Job Keeper is evident, but we will remove any JobKeeper amount.

PAYG: All industries acceptable*

Self Employed: All industries acceptable*