Income Types Lenders Won't Accept in Logan, QLD, What Actually Counts
Most borrowers assume that if money hits their bank account, a lender will count it. That is not how it works, and finding out mid-application is one of the most frustrating experiences in the home-buying process.
Whether you're on a roster with penalty rates, running your own ABN, collecting rental income or receiving support payments, how a lender reads your income can be dramatically different from what you actually take home. The gap between what you earn and what a lender will count is where most borrowing-capacity surprises live, and understanding it before you apply changes the outcome.
Our team helps buyers across Logan, QLD navigate exactly this, comparing how each lender treats your specific income mix across 60+ lenders. The home loan assessment is where that comparison matters most.
Key takeaways
- Lenders assess the income they can verify, not everything you receive.
- Variable income like overtime and bonuses is typically shaded or averaged.
- Different lenders treat contested income types differently, making panel access critical.
Which income types do lenders regularly reject or discount?
Lenders don't reject income arbitrarily. They apply serviceability rules set by APRA, their own credit policies, and the requirement that any income counted can be evidenced and is likely to continue. Where income is variable, unverifiable, short-term or legally contestable, most lenders will shade it, exclude it entirely, or require a longer history before they'll touch it.
The income types most commonly excluded or heavily discounted include casual and irregular income without a sufficient history, overtime and shift penalties, investment income such as rent or dividends, government payments like Family Tax Benefit or child support, self-employment income assessed without two years of returns, and income from a second job that has just started. None of these are absolute rules, but all of them are consistent pressure points across the market.
"The income conversation is the one that surprises people most. They come in with a payslip that looks healthy, and then we work through what the lender will actually count. Overtime they've been earning for years, a rental property, a partner on parental leave, a small ABN income on the side - each one gets assessed differently depending on which lender you're in front of."
Nevada Matthews · Mortgage Broker and Co-Owner, Cube Loans · Chat to Nevada →
How do lenders actually assess variable and contested income?
The core principle is consistency and verifiability. A lender wants to see that the income has been received reliably, that it's likely to continue, and that it can be proved with documents they accept. Where any of those three conditions is in doubt, the income gets discounted or excluded.
Overtime and shift penalties
Most lenders will count overtime and penalty rates if you've been receiving them consistently, but they won't take your best month. They average the income over a recent period, and some lenders shade it further on top of that. If the overtime has only appeared in the last three months, most lenders will wait until there's a longer track record before counting it at all.
Casual and agency income
Casual income is treated like any other variable income: lenders want to see consistency over time in the same field. If you've been casually employed in the same role or industry for roughly a year and your hours are stable, most lenders will count the average. Agency work, including agency nursing shifts or labour-hire, is assessed the same way.
Rental income
Most lenders accept rental income at around 80% of the gross rent, with holding costs added as commitments on the other side. They'll want a signed lease or a valuer's rental estimate. Where a property is vacant or the lease has just started, the income may not be counted at all until it's established.
Source: APRA.
Which specific income types are most often excluded entirely?
Some income types face near-universal exclusion, while others depend heavily on the lender and the circumstances.
Income types that are commonly excluded or heavily restricted:
- › Family Tax Benefit (FTB): accepted by some lenders, usually with a child age cut-off. If your youngest child is close to age-out, many lenders will exclude it entirely or reduce what they count.
- › Child support: accepted by some lenders where there's a court order or formal assessment, often with a child age cut-off applied. Informal arrangements are rarely counted.
- › Parental leave pay: most lenders assess the income based on a confirmed return-to-work letter, not the parental leave payment itself. If there's no letter confirming your return, the income is typically excluded during assessment.
- › Government pensions and welfare: assessed by some lenders, particularly for retirees, but many mainstream lenders exclude income support payments entirely.
- › Trust distributions: accepted by some lenders where the trust is the applicant's, usually with two years of distributions shown on tax returns. Not accepted at all by others.
- › Investment dividends and directors' fees: accepted by some lenders with a two-year history, excluded by others. The policy varies more here than almost anywhere else in the market.
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What happens to self-employment income and ABN earnings?
Self-employed borrowers face the most variable treatment of any income type. Standard lenders want two years of tax returns, and they assess your income based on what those returns show after deductions, not what went into your business account. If your returns show a low net profit because you've legitimately minimised tax, that low figure is what the lender counts.
Some lenders will add back certain deductions, like depreciation and one-off expenses, to get a higher assessed income. This is called an add-back, and it differs meaningfully between lenders. Some add back depreciation only; others add back a broader range. Where only one tax return is available, some lenders accept an accountant's letter in place of a second year, though fewer do this than commonly assumed.
If you've just started your ABN and have less than a year of trading, most mainstream lenders won't count that income at all. Some specialist lenders will work with a shorter history, but the rate and LVR conditions are usually different. The comparison between lenders on this point is often the most impactful one a broker can run for a self-employed borrower.
How does a mortgage broker help when your income is complicated in Logan, QLD?
The lender choice matters more for contested income than for almost any other borrowing scenario. Different lenders have genuinely different credit policies, and those differences move the assessed income by tens of thousands of dollars on the same application.
Three policy differences that move the number:
- › Overtime averaging period: some lenders average over three months, others over twelve. The same consistent overtime income produces a different assessed number depending on which period applies.
- › FTB and child support cut-off age: one lender might exclude FTB entirely, another counts it until the youngest child turns 11, another until 16. That age cut-off decides whether the income counts at all.
- › Add-back breadth for self-employed: lenders differ on which deductions they'll add back, and a broader add-back policy can lift your assessed income by a material amount on the same tax returns.
Knowing which lender's policy suits your income profile before you apply is what changes your outcome, and that's the comparison a broker runs across the panel.
"Where I see the clearest wins is when someone has been told their income won't count, and we find a lender that reads it differently. That's not about finding a lender who takes more risk - it's about finding the lender whose policy actually fits how that person earns. Those two things aren't the same."
Nevada Matthews · Mortgage Broker and Co-Owner, Cube Loans · Chat to Nevada →
When does a complicated income profile mean you should wait?
Sometimes the honest answer is that the timing isn't right and applying now will either produce a lower borrowing capacity than you need, or result in a decline that sits on your credit file.
If your casual work is under six months old in a new field, most lenders won't count it and you're better served waiting until you have a consistent history. If you've just transitioned from PAYG to ABN and don't yet have a year of trading, a mainstream lender won't assess your new income, which means you're assessed on whatever you were earning before - which may not support the loan you want.
If your overtime is genuinely inconsistent, an application based on a good few months can lead to assessment on a lower average once the lender takes the full period into account. That is not a problem the broker creates - it's a feature of how serviceability works, and a broker who tells you this before you apply has done more useful work than one who submits the file and hopes.
What approval challenges come up most often for borrowers with non-standard income?
Where borrowers most often lose ground:
- › Applying to the wrong lender first: a decline from a lender whose policy doesn't suit your income type sits on your credit file. Each application shows as an enquiry for five years, so the sequence of applications matters.
- › Buy Now Pay Later and ATO payment plans: both appear on bank statements and are treated as commitments by most lenders. A BNPL account doesn't need to carry a balance to be assessed - the existence of the account is enough at some lenders.
- › Credit card limits, not balances: lenders assess your credit card at roughly 3% to 3.8% of the limit per month, whether you pay it in full every month or not. A $20,000 limit on a card you rarely use is still a commitment in the lender's model.
- › Mixing income evidence: lenders want documents for the income type they've approved. Mixing payslips, tax returns and bank statements without clear explanation of what each covers causes delays and occasionally declines at the assessment stage.
- › Probation plus variable income: if you're on probation in a new role AND your variable component hasn't been in place long, you're dealing with two separate flags at the same time. Some lenders accept probation in the same field; fewer will also count untested overtime or allowances alongside it.
Source: APRA.
Frequently Asked Questions
Will lenders count Centrelink payments toward my home loan?
Some lenders accept certain Centrelink payments, including Family Tax Benefit, while others exclude them entirely. Eligibility depends on the payment type and whether the income is likely to continue, which most lenders assess using a child age cut-off.
Can overtime and shift penalties be used to borrow more?
Yes, most lenders will count consistent overtime and shift penalties, but they average the income over a recent period rather than taking your highest earnings. Some lenders shade the average further, so the lender you're in front of changes the number.
Does rental income help my borrowing capacity?
Rental income counts, but most lenders accept around 80% of the gross rent figure and add holding costs as a commitment on the other side. A recently vacant property or a new lease may not be counted until it's established.
How do lenders treat a second job?
A second job that's been running consistently for roughly twelve months is accepted by most lenders. One that started recently is usually excluded until a longer history is established, particularly if it's casual or irregular.
Can child support payments count toward my income?
Some lenders count child support where there's a court order or formal assessment, often applying a child age cut-off. Informal arrangements between parties are rarely accepted as income evidence.
Should I use a mortgage broker or go to my bank when my income is non-standard?
A mortgage broker, every time. Your bank assesses your income under one set of credit policies. A broker compares how different lenders treat your specific income mix and applies to the one whose policy fits - which is often the difference between approval and decline.
Your Next Steps
When your income doesn't fit the standard mould, the lender you approach first is one of the most consequential decisions in your application. Getting assessed by a lender whose policy doesn't suit your income type doesn't just mean a lower number - it can mean a credit file enquiry that complicates the next attempt.
The right lender for a complicated income depends on your situation, and that's a conversation worth having. Talk to the Cube Loans team or call 1800 774 756, and we'll compare your options across 60+ lenders.
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External Resources
Cube Loans, Loganholme and Logan, QLD, Cube Central Pty Ltd, Credit Representative 472851, authorised under Australian Credit Licence 517192, General information only - this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions.
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