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Bank tweaks income verification policy

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Malavika Santhebennur 5 minute read

A non-major bank has updated its income verification policies to “keep pace” with the changing landscape of employment in Australia.

Industry super fund-owned bank ME has announced changes to its income verification policies to address what the bank said is the “changing nature” of the Australian workforce.

In a note to brokers, the bank said it has changed the way it assesses income verification and restrictions to suit the growth of casual employment over the past three decades.

“This is to ensure that ME is keeping pace with the changing nature of work while ensuring appropriate verification of employment conditions,” the bank said in a statement.


From 4 February, ME made the following changes to the way it verifies income:

  • An applicant who has spent more than three months and less than six months in a job, and does not meet the requirement of being in an industry for 12 months will now be considered with a copy of the verified employment contract for the following employment types: PAYG (full-time, permanent part time: base income, second job, probation), casual, and contracted employees;
  • Increasing the permissable maximum break between roles from 31 to 60 days (in total over the previous 12-month period);
  • Considering overtime income if evidenced as being consistent over a 12-month period with the same employer/same industry;
  • Basing casual income on 48 working weeks; and
  • Aligning policy requirements with QBE Insurance by accepting additional minimum time in job for borrowers employed through a family-owned business.

Changes to income variance rules

ME has also announced it is updating its policy around the use of variable income.

Where the variance from last year’s income exceeds 10 per cent, ME will now accept a greater variance when the borrower provides clear mitigating comments supporting the income to be used.

However, the borrower’s file must include a clear explanation as to why this income has been included (for example: applicants being on previous maternity leave; previously part-time; having a recent promotion, etc.).


Applicantions submitted prior to 4 February will be subject to ME’s previous policy rules.

For approvals in principal (AIP) that were issued prior to 4 February, new policies can apply where the loan amount has not increased, where there has not been any increase in the loan-to-value ratio, the customer’s financial position and employment details remain the same, and standard AIP criteria apply (for example, acceptability of security).  

[Related: ME amends mortgage serviceability policy]

Bank tweaks income verification policy
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Malavika Santhebennur

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.


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