1. What the Board actually said

On 29 September the Monetary Policy Board decided to increase the cash rate target by 25 basis points to 4.60 per cent. The minutes of that meeting, held on 28–29 September and released on 13 October, record that the decision was unanimous.

Three threads run through the Board’s reasoning. The first is that upside risks it had flagged in August stopped being hypothetical: the minutes note that the Middle East conflict had broadened and that oil prices were by then significantly higher than had been assumed. The second is that members considered it prudent to reinforce the anchoring of medium-term inflation expectations — the language of a central bank worried less about the current print than about what households and businesses now assume about the next few years.

The third thread is the one with the most direct consequence for broker files, and it received the least attention in the coverage. Members recorded that the trade-off between inflation and full employment had deteriorated because of global cost pressures.

That is not a forecast of job losses, and it should not be read as one. It is a statement about the menu the Board believes it now faces: where supply-side cost pressures persist, returning inflation to target may require accepting slower growth in demand and employment than would otherwise be tolerated. The accompanying statement on 29 September said the Board would continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed, and that it would be attentive to the data.

2. What the ABS actually printed — and the caveat to carry

Labour Force, Australia, September 2026 was released at 11:30am on 15 October. On the seasonally adjusted series, the unemployment rate was 4.7 per cent, employment fell by 39,000 people in the month and the number of unemployed people rose by 9,000. The employment-to-population ratio fell 0.3 percentage points to 63.6 per cent and the participation rate fell 0.2 percentage points to 66.8 per cent. The underemployment rate rose 0.1 percentage points to 6.3 per cent.

Hours worked were close to flat, up 0.1 per cent for the month, but the composition moved: part-time hours fell 1.5 per cent while full-time hours rose 0.4 per cent. Over the year, employment was up 1.2 per cent and hours worked up 1.3 per cent.

Sean Crick, the ABS head of labour statistics, put the month plainly.

3. Read together, these two releases point at the income side of your file

For three years the serviceability conversation has been about the denominator: assessment rates, buffers, the repayment a borrower is tested against. Brokers became very good at that conversation because it was the binding constraint. It is still binding. But it is no longer the only thing moving.

What the September minutes and the September labour force release do together is make the numerator contestable. If the Board has accepted a deteriorating trade-off, and the first print since shows participation easing, part-time hours falling and underemployment up a notch, then the question a credit assessor is implicitly asking about your applicant’s income has changed from “how much is it?” to “how likely is it to still be there?”

That is not a new question. It has always been in the law and in lender policy. What changes in a softening labour market is how much weight it carries, how often the answer is marginal, and how much of the file’s fate rests on the evidence you gathered rather than the lender you chose.

The applicants this actually touches

In practice, a small number of income profiles absorb nearly all of this risk:

• Recently-started PAYG applicants still inside a probationary period, often with a strong industry history behind them.
• Casual workers, whose hours are the first thing to move when demand softens — and the September print showed part-time hours falling 1.5 per cent.
• Contract and fixed-term applicants, particularly those with a renewal date inside the next six months.
• Applicants relying on overtime, allowances, commission or bonus to reach servicing, where the variable component is the part most exposed to a slower economy.
• Applicants in sectors visibly exposed to cost pressure, where the income is permanent but the employer’s position is the question.

4. What the law asks you to inquire into and verify

This section is general information, not advice on your own obligations. The authority is the instrument, and your licensee or compliance adviser is the person to confirm how it applies to your process.

Under the National Consumer Credit Protection Act 2009, a licensee providing credit assistance must, within 90 days before the assistance day, have made a preliminary assessment in accordance with section 116 and made the inquiries and verification in accordance with section 117. The obligation carries a civil penalty of 5,000 penalty units. None of that is new, and none of it moved this month.

What is worth re-reading is ASIC’s guidance on how far those inquiries should go. RG 209 describes the process as scalable: at RG 209.81 to RG 209.83, ASIC states that what is needed to meet the obligations will vary with the circumstances of the particular application, that some circumstances put a consumer at higher risk of harm from incomplete or inaccurate information, and that the broker needs to apply their own judgment to what is reasonable.

Two items in RG 209.207 are directly on point for a softening labour market. ASIC says you should have regard to the source of the consumer’s income, and to how consistent and reliable that income is relative to the size of the payment obligations. The same paragraph asks you to consider how sensitive the consumer is to foreseeable changes in their obligations, including an increase in interest rates, and to events that can be expected to affect most consumers, such as occasional short-term absences from work where that will affect income. RG 209.209 closes the loop: information can only be taken into account if you have reason to believe it is true, or would have had reason to believe it was true had you made the inquiries and verifications that were reasonable.

5. What two panel documents say about unstable income

Regulation sets the floor; lender policy sets where a file can actually go. The detail below comes from two current documents — the Bank of Sydney Credit Policy dated 1 September 2026 and the AFG Align Thinktank Residential Credit Guidelines v20260817 — retrieved from a broker’s own CreditPolicy.ai library.

Probation: the same borrower, two different pathways

Take a common file: an applicant six weeks into a new permanent role, four years in the same industry, no gap between jobs.

Bank of Sydney’s primary income section accepts 100 per cent of gross base income for permanent PAYG salary and wages where the applicant can demonstrate a minimum of 6 months in the current role or 12 months in the same field or line of work, with a maximum of 2 employers during that period. Separately, it requires completion of any probationary period — adding that where applicants have been in the same field of employment they can be considered on an exception basis, and to call the relationship manager to clarify individual eligibility.

Thinktank’s guidelines approach the same fact pattern from the other end. Its PAYG salary and wages line accepts 100 per cent with a minimum of 6 months with the current employer, or, where the applicant has under 6 months with that employer because they are on probation, a minimum of 12 months continuous in the same occupation or industry — and the document states that this must be recorded within the Loan Summary. Its separate short-term employment line treats probation as a case-by-case assessment on the merits of the borrower’s overall position, at 100 per cent, noting that this may include length of employment in the same industry or a letter from the employer confirming employment is ongoing.

Casual income: a structural difference, not a shading difference

Bank of Sydney accepts 100 per cent of gross base casual income where the applicant can demonstrate a minimum of 12 months in the current role or at least 2 years in the same field of employment, with completion of any probationary period if applicable. Where the borrower has been casual for less than 12 months, the document requires 2 years of tax returns to support ongoing income sustainability. It then adds a condition that changes the shape of the deal rather than the number: casual employment income will only be accepted where the application is joint with a full-time salaried or self-employed applicant, so an applicant whose sole income is casual is not acceptable.

Thinktank’s casual line accepts 100 per cent on two recent payslips within 2 months of application, with a minimum of 6 months with the current employer, or a minimum of 12 months where the applicant has been with the current employer for under 6 months; where the year-to-date payslip shows less than 6 months, it looks for payslips, a PAYG payment summary or an income tax return for the last financial year.

Contract income and the renewal date

Bank of Sydney accepts 100 per cent of gross base contractual income where the applicant demonstrates a minimum of 12 months in the current role or at least 12 months in the same field or line of work, and has passed any probationary period if applicable. Contracts with less than six months to expiry are subject to the approving officer’s assessment of renewal prospects, and where the borrower has been on contract for less than 12 months, 2 years of tax returns are required.

That renewal clause is the one to diarise. In a labour market where participation and part-time hours are easing, a contract with five months to run is a question the assessor will ask, and the answer is better supplied by the broker up front than requested in a condition.

Variable income: where the two documents diverge most

Overtime, allowances, commission and bonus are the components that move first when demand slows, and the two documents treat them quite differently.

• Bank of Sydney — overtime, shift allowance and penalties: 75 per cent where it is not a condition of employment, with evidence of payment over a minimum of 6 months; 100 per cent for applicants in the essential services industries the document lists, and 100 per cent where the income is confirmed by the employer in writing as a permanent condition of employment, again with 6 months’ evidence.
• Bank of Sydney — commission and bonus: 100 per cent of the average of the last two years, where the applicant has been in their job or a similar role for at least 2 years, evidenced with payslips from the relevant pay periods and taxation documents. The document adds that discretion should be exercised where the industry is subject to volatility, giving real estate as its example.
• Thinktank — permanent allowances and overtime: 100 per cent where regular for more than 6 months, on a year-to-date payslip of more than 6 months’ duration that breaks out base from non-base income; where more than 6 months is not available, that breakdown plus the latest income tax return, PAYG payment summary or 6 months of payslips. The calculation annualises year-to-date figures including base pay and regular overtime and allowances.
• Thinktank — commissions and bonus: commissions at 100 per cent where regular for more than 6 months on the same evidence structure; bonus at 100 per cent where regular and ongoing, on a payslip evidencing a bonus within the past 12 months.

The operational lesson is that the two documents want different artefacts. One is asking for an employer letter characterising the overtime as a permanent condition of employment. The other is asking for a year-to-date payslip that splits base from non-base income. Both requests are easy to make of a client in the first phone call and awkward to make three weeks into an assessment.

6. The forecast split is the real planning problem

After the minutes were published, the major banks did not land in the same place. According to The Adviser’s reporting on 15 October, CBA and NAB retained forecasts of an extended hold, while ANZ and Westpac expect a further increase in November, which would take the cash rate to 4.85 per cent. The same report has ANZ describing a November hike as more likely than not, and CBA calling the minutes decisively hawkish while still expecting a hold and treating a November move as a clear risk. Those are the positions as reported by one trade outlet, and bank forecasts move; treat them as the state of the debate rather than settled fact.

The uncomfortable point for brokers is that you cannot resolve the split, and you should not try to. A broker who tells a client in October that rates have peaked is making a prediction the country’s four largest research desks cannot agree on. A broker who tells a client rates are definitely going up in November is doing the same thing in the other direction.

7. What to review this week

A focused pass over the pipeline, not a restructure of the business:

1. Flag every live file carrying probation, casual, contract or variable income. In most pipelines this is a minority of files and the whole of the exposure. If your CRM cannot filter on income type, the manual pass is worth the hour.
2. For each flagged file, re-read the chosen lender’s income section — not your memory of it. The requirements above differ in kind, not just degree, between two documents dated weeks apart.
3. Collect the specific artefact that lender’s document names. An employer letter confirming overtime as a permanent condition of employment is a different document from a year-to-date payslip splitting base and non-base income. Ask for the right one first.
4. Diarise contract expiry dates inside the next six months and get renewal evidence before an assessor asks.
5. Check any pre-approval you are still relying on. If it was assessed before the September rate move, confirm the position rather than assuming it.
6. Separate the two series in your client messaging. If you are citing the labour market, cite both the seasonally adjusted and trend figures, and the ABS’s own recommendation to read the trend.
7. Raise the marginal files with your licensee or compliance adviser rather than deciding alone what the reasonable standard is in a softening market.

8. Writing a file note that holds up

The best-interests and responsible lending record for a file like this is not long. It is specific. Four lines, in your own words, covering:

• What the income is and why you believe it continues. Not “income verified” — the actual basis: four years in the same occupation, employer letter dated and on file confirming ongoing employment, two years of tax returns supporting a casual history.
• What you shaded and why. If a lender’s document applies 75 per cent to overtime that is not a condition of employment, record that you applied the lender’s treatment rather than your own.
• What rate scenario you showed the client. The Board has said it may increase the cash rate further if needed. A note recording that you walked the client through a higher-repayment scenario, and their response, is worth more later than any forecast you might have offered.
• What you did about the exposure you identified. A contract expiring inside six months, a single-income casual applicant, a bonus carrying the last of the servicing — name it, and name the step you took.

That record costs a few minutes at submission. Its value is that it is written at the point in time the recommendation was made, which is the only point in time at which it can honestly be written.

Where this leaves the channel

Nothing in either release requires a broker to change a product recommendation. What they jointly change is where the uncertainty on a file sits. A Board that has accepted a worse trade-off between inflation and employment, and a labour market print showing employment down 39,000 on the seasonally adjusted series while the trend rate held at 4.6 per cent, together describe an environment where the income side of a file is the part most likely to be tested — by a credit assessor now, and by circumstances later.

Brokers do not get to forecast their way out of that. They do get to be the professional who identified the variable income, asked for the right document in the first conversation, placed the file with a lender whose policy fits it, and wrote down why. In a market where four bank research desks disagree about November, that is the part of the job that still rewards being good at it.

Common questions

Sources: Reserve Bank of Australia, Minutes of the Monetary Policy Board Meeting, 28–29 September 2026 (released 13 October 2026); Reserve Bank of Australia, Statement by the Monetary Policy Board: Monetary Policy Decision, 29 September 2026; Australian Bureau of Statistics, Labour Force, Australia, September 2026 and accompanying media release, 15 October 2026; National Consumer Credit Protection Act 2009 (Compilation No. 50, compilation date 10 June 2025), sections 115–117; ASIC Regulatory Guide 209, Credit licensing: Responsible lending conduct (published 9 December 2019), RG 209.81–209.85, RG 209.207, RG 209.209; Bank of Sydney Credit Policy dated 1 September 2026 and AFG Align Thinktank Residential Credit Guidelines v20260817, as held in CreditPolicy.ai; The Adviser, “RBA hints at further hikes in ‘hawkish’ minutes”, 15 October 2026.