Can you get a loan on WorkCover?
Yes, you can get a loan on WorkCover.
This includes both home loans and personal loans.
However, being on WorkCover may have an impact in relation to your chances of obtaining a loan.
Please keep in mind that this page does not constitute financial advice. We are lawyers not financial advisors and we are merely providing general advice in relation to the interaction between WorkCover and the lending institutions.
Also, different lenders may have different policies and so you should ensure to ask about the specific lending policy of your particular provider.
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Can you get a home loan on WorkCover?
Yes, you can get a home loan on WorkCover but being on WorkCover is relevant and is something that the lender will take into consideration.
A lender, whether that be a bank or other financial institution will want to know what your income is.
They will need you to provide details about your income so they can determine whether you will be able to meet your loan repayments.
In relation to determining your earnings, some of the things they might look at are;
- If you receive income from rental properties and any investment income
- What your normal wage or salary is if you are a wage or salary earner.
- If you’re self employed they will require financial statements.
- If you are receiving an income from the government (eg: Centrelink), they will require information in relation to this.
If you are on WorkCover, they will need information about how much you are receiving.
They will also need information about how long you are likely to receive payments from WorkCover for.
This can be difficult for to determine for someone that does not have experience in the WorkCover system and so it would be a good idea to engage the assistance of a lawyer or someone else who knows the ins and outs of WorkCover to assist you.
In our opinion, the WorkCover insurer is not likely to be of any real assistance to you in this regard.
One way a lawyer can assist you here is they can provide a letter or other documentation to the bank detailing what your income from WorkCover is now and is likely to be into the future.
So for example, are you likely to continue receiving weekly payments at the rate of 80%?
Are you likely to partly return to work and partly receive WorkCover payments and if so, what are your WorkCover payments likely to be (and what is your overall income likely to be).
Are you likely to receive payments beyond 130 weeks, and if so at what payment rate?
Are you likely to obtain any lump sum compensation, and how much compensation is it possible that you will obtain and when?
Many of these questions will be very difficult to answer, particularly if your WorkCover claim hasn’t been on foot for very long.
Banks and other lenders will also want to know what you own, that is what you have in your savings accounts another bank accounts, and whether you hold any shares, property or significant assets.
Banks and lending institutions will also want to know what you owe. So do you have another mortgage, any other loans, credit cards, leases and other debts?
Being on WorkCover will not automatically mean that a person cannot obtain a home loan.
However, the bank or financial institution will need information in relation to the WorkCover claim and what your earnings and income are likely to be under that claim.
And because this can be quite complex, being on WorkCover may delay the processing time of your home loan application compared to if you were just earning a normal salary and not on WorkCover.
We have been told this by an employee of a large financial institution.
You may find that the bank or financial institution gets back to you after you provide them with information in relation to your WorkCover claim, requesting further information and they may do this more than once.
Given that being on WorkCover may delay the processing of your home loan application, if you are wanting to buy a property and you have your eye on a particular one, you should make an application for home loan approval as soon as possible.
What about obtaining a personal loan while on WorkCover?
Like with a home loan, you are able to obtain a personal loan while on WorkCover.
Being on WorkCover does not automatically mean that you will not be entitled to obtain a loan.
However, just like in relation to a home loan, the lender will need to know details about your WorkCover claim and income currently and likely income into the future under the claim.
They want to be sure, as much as they possibly can be, that you will be able to meet the required repayments under the loan and this involves consideration of your current income.
Again, you may find that being on WorkCover as opposed to earning a wage delays the processing of your loan application so if there is something that you specifically want the loan for, and you could miss out on it, you should apply for loan approval as soon as possible.
You are able to obtain a home loan or personal loan while you are on WorkCover.
Being on WorkCover does not automatically prevent a person from obtaining a loan.
However, being on WorkCover can impact your ability to obtain a loan.
The lender will need information in relation to your current income under your WorkCover claim and likely income into the future.
It’s possible being on WorkCover will mean that your chances of obtaining a loan are less compared to if you had a regular income which was likely to continue by way of a job.
Also, we’ve been told that the being on WorkCover may result in the processing time of home loan applications as well as personal loan applications being extended so you should ensure to put your application in for the loan as soon as possible.