INNOVATION

Major Bank Set To Recognise Parental Leave For Home Borrowers

And level the playing field for modern working families.

03/06/2016 2:45 PM AEST | Updated 15/07/2016 12:53 PM AEST
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Westpac is taking steps to improve home lending options for new parents.

Home borrowers on parental leave can now have their paid leave and their return to work income recognised when applying for home lending, a major bank has announced.

Westpac introduced the measure following policy review and research that showed almost 90 percent of Australians believe banks should look beyond short-term scenarios when assessing borrowing potential -- particularly for women and new parents.

"I have two little girls of my own, and when you're at home with your kids, that's when you look around and consider your living arrangements," Westpac's Director of Women's Markets Ainslie van Onselen told The Huffington Post Australia.

"A lot of things are going through your mind, and that's the exact time that we have been saying 'no, we won't help you'."

Previously, paid parental leave and any future income were not factored into home lending applications.

"Times have changed. More women are working, more are going back to work after they've had their children and, at the same time, house prices have gone up. We need to be adaptive in response."

According to van Onselen, parents were missing out across the industry.

"Paid parental leave was considered on a case-by-case basis and in some instances, it could be included. But on the front line, the default request was to not include it."

The Westpac Group is changing its standard procedure to make the measure available to all families -- from single-parent families to adoptive families -- and to increase their borrowing capacity.

Parents who want to be eligible for a loan while on parental leave for up to 12 months are required to provide proof of a return to work date and income, as well as showing they can service the loan while on leave.

The move also comes in response to a changing workforce, with 67 percent of Australian women of working age now earning an income and 95 percent of parents returning to work, according to in-house Westpac research.

"Times have changed. More women are working, more are going back to work after they've had their children and, at the same time, house prices have gone up. We need to be adaptive in response."

And it comes down to flexibility, said van Onselen -- a key trend across the corporate world as companies and institutions are increasingly meeting the needs of Australians who are seeking out non-traditional working roles.

"There is definitely an increasing demand for flexibility. 71 percent of people are now working flexibly. And corporate businesses are getting into the business of introducing it because staff are more loyal and more engaged, " she said.

"It builds great trust. It's all about being fluid and agile."

Also this week, professional services giant PricewaterhouseCoopers scrapped its staff dress code in a bid to "unlock the creativity and diversity" of its people.

Staff will no longer have to abide by PwC's now-dead, strict dress standards that specified everything from "fine knitwear" for men to "smart shirts" and stockings for women.

The new and improved dress code is part of PwC's bit to extend flexible working to its employees.

"To be successful, we need to give our people the autonomy to try new things, be different, bring their ideas forward and give them a go. You can only do that in an environment where you feel trusted and respected," human capital leader Sue Horlin told the Australian Financial Review.

And small businesses are also jumping on the bandwagon. One of many, Brisbane start up Flex Able works with firms and institutions to increase the scope of flexible work options for all employees who can gain value from it. All jobs on its website offer an element of flexibility that not only saves money and boosts productivity but retains talented staff.

"It builds great trust. And it's all about being fluid and agile," said van Onselen.

"Now, you can look at what work you need. You work where you want to work and your outputs end up being even greater."

Westpac was 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.

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