Lenders Are Starting to Count DVA Payments as Income. Not All of Them, and Not All of It

If part of your income is a DVA payment, somebody has probably already told you it does not count towards a home loan.

That was never true across the board, and it just got less true.

Broker Daily, in its lender policy round up for the week to 1 October 2026, reported a lender expanding its servicing policy to accept government benefits, pensions and maintenance income, effective immediately. The eligible list it published names Department of Veterans' Affairs payments and Defence Force pensions directly, alongside Centrelink benefits, age, disability and carer pensions, and child support or maintenance payments.

The cap is the bit to read twice. Those income types can make up to 50 per cent of total assessable income. Rental and investment income are excluded from that calculation.

Here is what a cap written that way actually means, because it is not obvious.

If the payment can be at most half of your total assessable income, then it can be at most equal to everything else you earn. Not half of your pension counted. Half of the total.

So say you have $40,000 a year of DVA payments and $40,000 of other assessable income. Total $80,000, the payment is exactly half, and the whole lot counts.

Change the other income to $20,000 and it does not work the same way at all. For the payment to sit at half the total, only $20,000 of it can be counted. The other $20,000 is ignored, and your assessable income is $40,000 rather than $60,000.

Which means the usefulness of this policy depends almost entirely on what sits next to the payment. If the pension is most of what comes in, a cap like that still leaves a lot of real income on the floor. If it is a top up alongside a wage, it can count in full and it can move the number meaningfully.

That is worth knowing before you get your hopes up or write the idea off, and it is the kind of detail that gets lost when a policy change turns into a headline.

The broader point is the one that matters more than any single lender's rules.

Income types are not a yes or no across the Australian market. They are a policy, and every lender writes its own. One lender will not touch a particular payment at all. Another will take it in full with two statements as evidence. A third will take it with a haircut, counting 80 per cent of it, because it wants a buffer against the payment changing.

Same income. Same person. Three different borrowing capacities.

So when an ex serving member is told their pension does not count, what has usually happened is that one lender's policy got delivered as a fact about the whole market. It is not. It is one answer from one credit policy, and there are a lot of lenders in this country, each writing its own.

It is worth understanding why lenders are cautious about this income in the first place, because it tells you what evidence will move them. A lender is not sceptical of a DVA payment because it doubts the government will pay. It is asking a different question. Will this payment still be landing in five years, and in ten, at the same amount. A payment that is permanent and indexed is a very different proposition from one tied to a circumstance that may change, and the lenders that count these payments properly are the ones that bother to tell the difference.

A few honest limits on all of this.

This is one lender changing one policy, not a shift across the market, and lender policy moves constantly. What was reported in the first week of October can be tightened in the first week of November. Anything you read about a specific policy, including this, is worth confirming as current before you make a decision on the back of it.

It is also a servicing policy change and nothing more. Nothing about your entitlement has changed. Your DVA payments are what they always were, and what has changed is one lender's willingness to count them when it works out what you can afford.

And a policy that accepts an income type is only one part of a file. A lender with the most generous policy on one page of your file is not automatically the right one for the whole file. It might be stricter on something that matters more to you, like the property type, the deposit, or how it reads an allowance line.

What this is really worth, practically, is a reason to get the question asked properly.

If you are ex serving, or you are serving with a partner receiving a payment, and you have been working off a borrowing figure that assumed the payment counted for nothing, that figure is probably wrong. Possibly wrong by a lot. It is worth redoing with somebody who will go and read the policy rather than guess at it.

Bring the payment letters and twelve months of statements showing the payments landing. Evidence is usually what decides whether an income type gets counted, not the income type itself.

Has anyone ever told you a government payment of yours could not be used for a home loan? It is worth asking the question again, because the answer changes by the month.