Recognising parental leave in home lending
3 June 2016
Westpac recently announced that recognising paid parental leave and return to work income when assessing borrowing potential for home lending is now standard operating procedure.
According to Westpac research 88 per cent of Australians believe a bank should look beyond an individual's short-term situations, such as parental leave, when assessing borrowing potential. In addition, 82 per cent of Australians agree it is fair that a bank considers the future income of a person on parental leave when assessing loan suitability.
Ainslie van Onselen, Westpac's Director of Women's Markets said, "As part of our ongoing commitment to customers, we continually review our policies and processes to make sure we provide products and services that suit their needs. We've listened to our customers and today's announcement is a positive change that will benefit many current and future families across Australia."
Ainslie added, "Recognising paid parental leave and back to work income is about creating financial choice and an even playing field for working families - whether that be renovating, upgrading or buying a new property. Our research also shows 63 per cent of females who own a home believe their needs and requirements from their home grow as their family expands."
Highlighting Westpac's commitment to women and families, Ainslie said, "As the first bank to set up a dedicated business unit for women, we have a long and proud history of supporting women and families to achieve their financial goals.
"We were also one of the first publicly listed companies to introduce paid parental leave in 1995 and the first to introduce superannuation on unpaid parental leave to eligible employees in 2010. These industry-leading initiatives had flow on effects throughout corporate Australia and helped reverse the Australia-wide retirement savings gap experienced by female employees."
To be eligible for a loan while on parental leave, for up to 12 months, customers will need to provide proof of a return to work date and income and demonstrate they can service the loan while on parental leave. Today's announcement impacts home lending, and meets Westpac Group's responsible lending obligations.
Westpac Home Lending research
The research was commissioned by Westpac and conducted by Lonergan Research. Lonergan Research surveyed 2,289 Australians aged 18 and over who have ever worked. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted between 20 and 25 May 2016. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
Westpac Home Owns Report
The report was commissioned by Westpac and powered by Lonergan Research. Lonergan Research surveyed 1,115 Australian home-owners aged 18 and over. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted between 25 August and 1 September 2015. Following the completion of interviewing, the data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.