Receiving Centrelink payments doesn’t cut off your access to credit. Discover what loan options are available to you.
When you receive Centrelink payments, whether it's a carer's allowance, the disability pension or another type, you might find it difficult to access credit. However, there are options available to you when you need finance. These include banks and credit unions as well as short-term lenders. Government and community financial assistance schemes are also available.
Read the guide below to find out if you're eligible for a loan while receiving Centrelink. You can find out about Centrelink business loans here and if you are looking for a home loan, read our Centrelink home loans guide.
If you’re experiencing financial hardship and would like to speak to someone for free financial counselling, you can call the Financial Counsellors hotline on 1800 007 007. It is open from 9:30am to 4pm, Monday to Friday.
Tips on making your application count
- Know if you are eligible. Check the minimum eligibility criteria listed on finder.com.au review pages before you apply for a product. If you meet the minimum eligibility you will be able to apply, although keep in mind that you may not be approved as applications are handled on a case-by-case basis.
- "Centrelink accepted". You may not see this on bank or lender's sites, but that doesn't mean they will not accept your Government benefits as income. You can often check whether the lender requires you to be employed or if they explicitly state that those on Centrelink are unable to apply.
- Give yourself the best chance of being approved. You may want to get in touch with a lender to discuss your eligibility, or you may even want to call your current bank who you may have a better chance of being approved with.
Loan options you have if you receive Centrelink
Now that you know how much you can borrow, let's take a look at the lenders who may accept Centrelink benefits as genuine income. Click on the links to see their range of products and to see their eligibility requirements.
|Cash Converters||Your loan repayments cannot exceed 25% of your gross income.|
|Cash First||Must also be employed and not be receiving Newstart or DSP.|
|Cash Stop||You're able to apply, even if you receive Newstart or Youth Allowance.|
|ClearCash||You're able to apply, applications are handled on a case-by-case basis.|
|Credit24||You can apply as long as Centrelink payments are not more than 50% of your income.|
|Dollars Direct||You need to have been employed for at least one month.|
|Ferratum Loans||More than 50% of your total income or 20% of your repayments can't come from Centrelink.|
|Good to Go Loans||You're able to apply, applications are handled on a case-by-case basis.|
|Max Finance||Sole income from Newstart, Youth Allowance or Austudy is not accepted.|
|Money Start||You need to be employed and earn more than 50% of your income through employment.|
|Nimble Short Term Loans||-|
|Rapid Finance||You're able to apply, applications are handled on a case-by-case basis.|
|American Express||Handled on a case-by-case basis|
|ANZ||Minimum income $15,000 p.a.|
Austudy or Youth Allowance is not eligible
|Bank of Melbourne||Most Centrelink payments are accepted|
Provide a letter from Centrelink (or Department of Social Security, or equivalent) detailing your current entitlements
|BankSA||Accept all Centrelink payments except Newstart|
|bankmecu||Accept Centrelink benefits as income|
|Bankwest||Accept parenting payments and DSP as income|
|Bendigo Bank||Accept Centrelink benefits as income|
|Citibank||Minimum income $35,000 p.a.|
Will consider the payments if type of Centrelink income is taxable
|Commonwealth Bank||Minimum income $14,004 p.a.|
Accepts parenting payments, DSP and carer's pension as income
|HSBC||Minimum income $30,000 p.a.|
will consider the payments if type of Centrelink income is taxable
|IMB||It may be considered if you are also earning a wage. Cannot be your sole source of income.|
|NAB||Handled on a case-by-case basis and strict criteria applies|
|St.George||Accept parenting payments and DSP|
|Suncorp||Minimum income $25,000 p.a.|
Will consider some Centrelink payments
|Westpac||Handled on a case-by-case basis and depends on the type of income you receive|
Parenting payments are not considered a type of income
DSP is accepted
Your other options: Government and community financial assistance
When you receive Centrelink payments or earn a lower income, traditional financial institutions or even payday lenders are not your only options. There is a range of schemes and programs that give you access to credit, often for no or low interest. Here are some of the options that are available:
- Pension loans scheme. If you're of age pension age, you have equity in Australian real estate and you or your partner receives a reduced age pension rate, you could be eligible for a Pension Loan. These can be short term loans or a loan over a longer period, and how much you're eligible for depends on the equity you have and your age when the loan is granted. Currently, the rate for this scheme is 5.25% and compound interest is charged on how much you owe.
- NAB StepUP. Developed by NAB and Good Shepherd Microfinance, these are unsecured personal loans of between $800 and $3,000 for individuals and families on low incomes. They are offered at a rate of 5.99% p.a. and are designed for the purchase of essential goods and services.
- No interest loans scheme (NILS). This is a loan offered by Good Shepherd Microfinance that's designed to be repaid over a 12- to 18-month period. You can apply for between $300 and $1,200 for essential goods and services and you'll be charged no fees and no interest. Eligibility criteria include that you have a Health Care Card/Pension Card or that you are on a low income, that you've been in your current residence for three months or more and you show a willingness and capacity to repay.
- Centrelink cash advance. Depending on what payment you receive, you could be eligible for an advance on your Centrelink payments. Your eligibility also depends how long you have been receiving payments and how much you receive. Keep in mind you can usually only receive an advance once a year.
- Concession cards. As a current Centrelink recipient you may be eligible for a concession card, which you may be unaware of. Check on the Centrelink website to see what's available.
- Good Money. If you reside in Victoria and receive Centrelink payments, you may be eligible for a low or no interest loan from Good Money. Eligibility includes that you're looking for a loan top cover vehicle repairs, educational and medical expenses, bills or even debts. Visit its website to find out more.
- Service's Relief Trust Fund. Australian Defence Force Members can access no and low interest loans as well as grants through this fund. These are then repaid through your salary.
- Fairloans. This non-profit has also partnered with NAB to offer loans to people for up to $3,000. The loans are repaid over a period of 12 months.
What types of personal loans am I eligible for if I receive Centrelink?
You have a few options if you're receiving Centrelink payments and are in need of a loan. Generally, you'll find lenders who can offer you:
- Personal loans. You're able to apply for personal loans from banks, credit unions and other lenders even when you receive Centrelink. You will have to meet a minimum income requirement and not all types of Centrelink income are accepted. To see what banks will consider you, take a look at the table above.
- Payday loans. These are small, short-term loans that are available to Centrelink applicants as well as those with bad credit. You're normally able to apply for up to $2,000 although sometimes up to $5,000 or more is available.
- Car loans. If you're looking to purchase a car, you can consider a secured car loan from a lender that accepted Centrelink applicants. You can purchase a new or used car and use it as security for the loan to get a lower rate.
- Overdrafts. Do you want credit you can use in an emergency? An overdraft is linked to your account and lets you draw up to and including a certain limit. If you have a good history with your bank you can be approved, even if you receive Centrelink.
- Alternative financing. There are also various community financing programs and alternative sources of financing you can consider as well as an advance from Centrelink. These are outlined on the page above.
Calculate your borrowing ability
If you think you’re eligible, look at your most recent Centrelink statement to determine your annual income (this may involve you multiplying your statement by 26 as payments are received every fortnight). Remember to include your supplementary income, or income from your co-borrower.
Understanding your Centrelink payments
It can be easier to be approved for a loan when receiving certain types of Centrelink payments over others. For instance, youth allowance is a common payment that is not accepted by lenders as a form of income. The first step to applying for a loan is to identify what type of Centrelink benefit you are currently receiving. This can be done by looking at your Centrelink documents. Here is a breakdown of the Centrelink payments that are available and whether they are generally accepted by lenders:
- Age Pension. This provides you with monetary support when you're retired. Many payday lenders accept this as a form of income while banks may require supplementary income.
- Carer's Allowance. If you're caring for a dependant person, this provides you with 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 although you may find some payday lenders will.
- Austudy. This is for full-time students and Australian apprentices 25 years or older. You may find it difficult to get a loan with this as your income.
- Foster Care Allowances. This is a fortnightly payment intended to help you support and pay for a foster child in your car. You may be able to include this as part of your income but you will need to earn supplementary income.
- 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 find some lenders will not accept this as a form of income.
- Child Support Payments. This is income received to help cover the cost of raising your child or children. You may be able to have it included as part of your income if you can provide a copy of the Family Law Court Order, bank statements proving you receive this income, a letter from your 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. Family Tax Benefits Part A and B is generally accepted by lenders but having supplementary income will help. The age of your children will also be taken into consideration.
- Overseas Pension. If you receive the pension from overseas some lenders may recognise it as income. This is generally if your 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 and the USA. You might be required to show that pension is ongoing for a period of time.
When you're looking for a loan, considering all the options available to you can better place you to find the one that best suits your needs. Hopefully this guide had made this process much easier to understand, and has provided a background about how lenders make their decisions.
Supplementary income - Income that you may have from a full time or part time job. This also includes income that may be earned by your partner or joint applicant.
Taxable income - Income that you will need to pay tax on, after you have deducted all expenses you are allowed to claim.