Strategy · September 2026 · 5 min read
Two lenders can look at the same ADF payslip and land on very different borrowing figures. The difference is policy, not your income. Here is what gets counted, what gets ignored, and what actually helps a file.
Photo: Kgbo, CC BY-SA 4.0 via Wikimedia Commons
There is a version of this conversation that happens over and over. A serving member gets a borrowing figure from a bank, takes it as gospel, and starts looking at places in that price range. What nobody tells him is that the figure is not really a fact about his income. It is a fact about how that one lender decided to read his payslip.
Defence pay is not complicated. It is just unfamiliar. And unfamiliar is what gets money left on the table.
An ADF payslip is salary plus allowances, and the allowances are where it gets interesting. Defence publishes the full list on its own pay and conditions site. The current list includes things like field allowance, flying allowance, separation allowance, rent allowance, higher duties allowance, disturbance allowance, travelling allowance, meal allowance, special forces allowance, paratrooper allowance, language allowance, the submarine capability assurance payment, and the maritime crew allowances that run from A through to F.
Some of those are a regular part of how a person gets paid. Some only exist while a member is doing a particular job, in a particular place, on a particular platform. Some are closer to a reimbursement than income at all.
That distinction is the whole ballgame, because a lender has to decide which bucket each line belongs in before it can put a number in a servicing calculator.
There is no single industry rule for defence allowances. There is no standard that every bank signed up to. Each lender writes its own policy, and those policies genuinely differ.
One will take an allowance at full value because it is ongoing and evidenced. Another will apply a discount to it, on the reasoning that it could stop when the member posts out. A third will not count it at all, because whoever wrote the policy did not have a category for a line item called maritime crew C allowance and defaulted to ignoring it.
None of that is a lender being difficult. A credit assessor in a processing centre is reading a document they see rarely, against a policy that was written for civilian pay structures. If the file does not explain what each allowance is and whether it continues, the safe answer for them is to leave it out.
Leaving it out is what costs the member. Not by a bit either. On a payslip carrying a few thousand dollars a month in allowances, the gap between a lender that counts them and a lender that does not is not a rounding error in a borrowing figure. It is the difference between two very different sets of properties.
Most people only ever ask one lender.
They walk into whoever they bank with, get a number, and treat it as the ceiling on what is possible. If that lender happens to be one that reads allowance income conservatively, the member never finds out that the number was a policy decision rather than a limit on their actual capacity.
This is not an argument that everyone should go shopping around eleven banks. It is an argument that the first number you get is a starting point, not a verdict.
A few unglamorous things move the needle here more than anything clever.
Full payslips, not a summary. The lender needs to see each allowance itemised, with the amounts and the frequency, usually across a few pay periods so it can see the pattern rather than a one off.
Something that shows the allowance is ongoing. A pay summary out of PMKeyS, or a letter from the pay office or unit confirming which allowances are continuing and which are tied to a temporary posting or task, does a lot of work. It turns an unexplained line item into a documented one.
A plain english explanation attached to the file. Someone has to actually write down what the allowance is and why it should be counted. If nobody does, the assessor makes their own call, and their own call is usually the conservative one.
Consistency between the payslips and the application. Sounds obvious. It is one of the more common reasons a file goes back and forth.
If you are looking at the Defence Home Ownership Assistance Scheme alongside all this, one feature of the scheme catches people late.
DHOAS is a monthly subsidy paid towards the interest on an eligible home loan. To use it, the loan has to sit with a lender on the DHOAS approved home loan provider panel. That panel is a short list, not the whole market, and it does not change often.
That matters because the lender that reads your allowances most generously and the lenders on that panel are not automatically the same thing. It is a comparison worth actually running rather than assuming, especially when the subsidy amount and the difference in borrowing capacity are pulling in opposite directions.
Eligibility for DHOAS, the service credit and the subsidy tier are determined by the Department of Veterans' Affairs, not by a bank and not by a broker. The current panel and the official calculator sit at dhoas.gov.au, and the DHOAS line is 1300 434 627. Anyone telling you what your entitlement is worth without you having been through that process is guessing.
Defence pay is not hard to assess. It is just read badly by people who do not see much of it.
If a borrowing figure came back lower than you expected and nobody walked you through which allowances were counted, that is the question to ask. Not whether you can afford more. Whether the lender actually counted what you get paid.
Which base are you at, and did anyone go through your allowances line by line the last time you applied?
This article is general information only. It does not take your situation, objectives or needs into account and it is not credit advice or a recommendation of any product or lender. Vairo Finance is not a DHOAS loan provider. Eligibility for Defence housing schemes is determined by the relevant government body, not by us. Wil Conroy is a credit representative authorised under Australian Credit Licence 389328. Speak to us about your own circumstances before acting on anything here.
The information in this article is general in nature and does not take into account your personal circumstances. Speak with a qualified mortgage broker before making lending decisions.
