Agency Training 2012. 10:30Registration 10.45NILS Training 12:30 Lunch 01.00NILS Training 3.00Latest Developments 4:00Close.

WA No Interest Loans Network Inc

Agency Training2012

10:30 Registration

10.45 NILS Training

12:30 Lunch

01.00 NILS Training

3.00 Latest Developments

4:00 Close

Today’s Schedule

The WA No Interest Loans Network Inc. (with the commitment of member agencies) aims to provide families and individuals on low incomes across Western Australia with the opportunity to apply for a loan to purchase essential household items, without the burden of interest charges or fees.

At present, WA NILS provides loans between $200 and $1,500 for the purchase of essential household items, predominantly but not exclusively white goods. It is a commercially operated loan scheme with a central administration office, which services applications received from Network Members throughout Western Australia. Network Members are community organisations and welfare groups located state wide, from Wyndam to Esperance.

Who are WANILS?

In February 1999, the Minister for Family and Children Services (FCS), the Hon. Rhonda Parker announced the replacement of the Departmental Furniture Assistance Loans Scheme, with a community based No Interest Loans Scheme, and that funding would also be enhanced to establish the new scheme.

In August 1999, the Minister for FCS signed a memorandum of Understanding with Anglicare WA to act as a sponsor of the No Interest Loans Service (NILS) Network from the period August 1999 to 31 December 1999.

NILS operate in some form in every state. Victoria has the largest number of schemes, over 40 and has formed a state NILS network. WA is funded by the Department of Child Protection and the Federal Government.

WANILS History

An interest free loan for low income earners and those financially excluded

Loan amount from $200 - $1500

Up to two essential household items

No fees, charges or interest

NILS is NOT for

Emergency relief, bond, rent money, living expenses, debt repayment, lay-by or second hand items (except gophers)

Not a grant or short term finance e.g. payday loans

What is NILS?

Prior to the Interview....

Geographic eligibility (we then know who to refer client too)

Must have a Pension or Health Care Card

Income eligibility test- Low Income Health Care Card

Intended purchase on list of approved items

Residency for 3 months - private rental

Undischarged bankrupt – Notification of bankruptcy

One loan per household

First Contact with Client

WANILS Info pack

1. What to bring to your interview list2. Client information sheet 3. Loan application & agreement4. Budget 5. Quote forms

Partners are included as joint applicants unless exceptional circumstances

Both partners income and expenditure need to be included

Obtain quotes IMMEDIATELY PRIOR to interview

What to bring to interview

At the Interview....

Stress privacy and confidentiality of client information

Make client responsible for collection of documents

Avoid multiple interviews

Better documentation minimises queries, complications and reduces approval time.

Effective Strategies

Pension or Health Care card

Drivers licence

Ensure identification forms are current

Check current address

Identification

Explain to client the purpose of doing a detailed budget

Discuss each item with client and ensure the budget is realistic and correct

Supporting documents provide some information required

Mandatory for the current debt payments and outstanding balance of debts to be supplied

Raise awareness around cost saving e.g. bank fees

Household Budget

IncomeCentrelink

Income StatementCentrelink Rate of

Payment letter

Centrelink Income Statement Include:

Previous payments if applicant(s) earn wages

Future payments if applicant(s) does not earn wages

Please read asterisks

$60.00 GHACA (DO NOT INCLUDE)

Recent payslips - four consecutive weeks

Authentic – employer name & ABN

Use NET earnings not GROSS

Reported to Centrelink

If irregular earnings, average the four week period to calculate fortnightly amount

Wages

Child Support Income

Child Support Assessment and the Centrelink Income Statement show client’s entitlement but are NOT PROOF of receipt

Child Support Payee Transaction Summary

Child Support Payee Payment History

Bank statement showing 3 months regular payments

If paid privately- a dated/signed letter from the other parent stating the regular amount paid, how often and a contact number.

Child Support Income

Child Support Payee Transaction Summary

Child Support Payee Payment History

Board income is not accepted unless there are exceptional circumstances

Baby Bonus not included as income

Other income – may be acceptable Please contact WA NILS before submitting application

Other Income

Include all deductions in the budget

Explain purpose of Centrepay deductions either in support letter or by note on Centrelink Income Statement

Deduction summary is obtainable from Centrelink online

Centrelink Deductions

Treat as a Centrelink deduction

Ensure that spending of managed income is reflected in budget with explanations

Centrelink provides three monthly statement of managed income showing expenditure - client may request copy

Centrelink Income Management Customer Service phone number 13 25 94

Centrelink DeductionsIncome Management

Homeswest screen dump or recent Statement of Accounts

Ensure fortnightly rent is budgeted - not weekly

Verify current address and rental payments

Accommodation - Homeswest

HomesWest Screen Dump

Has resided at address for at least 3 month

Current tenancy agreement or other proof

Four weeks of recent dated rental receipts

Verify current address, length of tenancy and rental payments

3 months wait not required if a long term tenancy agreement was held at prior address – provide proof

Boarders ineligible – as name not on tenancy agreement

Accommodation – Private Rental

Mortgage statement showing name, address and monthly repayments

Certificate of Title if no mortgage

Water rates and council rates included in budget

Calculate fortnightly sums from annual rate notices

Accommodation - Homeowner

3 months recent bank statements required with application for all accounts

Ensure statements are in applicants name and current

Scrutinise bank statements for debits and credits that may impact loan eligibility and capacity to repay

e.g. authorised payments, direct debits, loan repayments, insurance, child support payments, Foxtel, Chrisco, wages, credit card payments, hire of white goods, debt collectors, memberships etc, pay day lenders

Bank Statements

Utility bills – electricity, gas and phone Fortnightly usage= Average Daily Cost multiplied by 14

days

Bank statements, Credit card statements (if applicable)

Medical letter (compulsory for medical equipment)

Mandatory supporting documents

Mr Rental/ Radio Rental statements

Pawnbrokers/ other loan statements

Chrisco letter

Other supporting documents..

If the actual costs incurred by a client are higher than the prescribed minimums, then the actual costs should be used

Expense Minimums

  NEW COSTS

Energy, gas, electricity, wood  

For all occupants of a household  

        One person $30

        + 2nd person over 12 years old $10

        + 3rd person over 12 years old $5

        + 4th person over 12 years old $3

       Household with 5 or more people over 12 years old

$50

Water        $5

Telephone $20

Internet (if applicable)         $15

Car Registration (if applicable) $15

Car Running Costs (if applicable) $30

Fares $5

Food/Groceries per person  

        over 12 years of age $100

        to 12 years of age $60

Medical/Dental $10

Surplus Formula D/I Ratio Formula

Total Income- Total Expenses- Total Repayments=Fortnightly Surplus

Accommodation Sub-Total+ Utilities Sub-Total+ Car Registration and

Insurance only+ Total Repayments= Total Debt

Total Debt/ Total Incomex 100

= D/I Ratio %

Surplus and Debt to Income Ratio Electronic spreadsheet will automatically calculate Manual formulas in Resource Pack

Debt to Income Ratio and Surplus must be within eligibility guidelines

Debt to Income Ratio must not go over 64% Budget Surplus- Over $45 for loans under $1000 or over

$75 for loans $1000 - $1500 Budget surplus must not be more than $300

Budget Eligibility Tests

Must be realistic when compared to bank statement and other supporting documentation

Revisit expenses that may be exaggerated or underestimated

Household Budget Overview

Interviewer may use discretion and not submit the application

Explain that, if submitted, the application may not be approved by the Loans Committee

Duty of care – refer to financial counsellor if applicable

Suggest they reapply after circumstances have changed or budget/debt issues have been addressed

Budget Deficit or Excessive Debt

Client must have capacity to repay

WA NILS loan should not cause greater financial hardship

NEW POLICY:

Repeated bank overdrafts, dishonoured debt repayments, unpaid utility bills and pre-existing debts, demonstrate in the opinion of the Loans Committee inadequate financial management an application should be declined.

Lending Ethics

Client must disclose all relevant information

Dishonesty may equate to fraud

Repayment of loans: replenishes the money pool enables future loans to client and others

Money pool has been lent many times over and repaid many times over since 2000

Borrower’s Ethics

Loan Documents

Loan Application and Agreement form *

Complete all sections

Ensure details match supporting documents e.g. CRN, length of tenancy

Include partner details

Enter – total $ amount of preferred

quote(s) fortnightly repayment

To be signed by applicant(s)

Witnessed by agent

WANILS Database

LOAN REPAYMENTS PER FORTNIGHT

Minimum repayment : $3.00 per $100 per fortnight. If client can afford to pay more, it is recommended they do so, since the sooner a loan is repaid in full the sooner they can re-apply for another loan to purchase another item(s).

LOAN AMOUNT MINIMUM

REPAYMENT PER FORTNIGHT

$200 - $300 $10.00

$400 $12.00

$500 $15.00

$600 $18.00

$700 $21.00

$800 $24.00

$900 $27.00

$1000 $30.00

$1100 $33.00

$1200 $36.00

$1300 $39.00

$1400 $42.00

$1500 $45.00

Quotes Items must be on approved list-

if not- please call to discuss

Air conditioner quote must include installation (if applicable)

Valid for minimum 30 days

Sale items discouraged

$1500 + $50 cash contribution from client, if required

Client chooses preferred quote

Prefer both trader quote & WANILS quote form

Chartered traders

Chartered Traders Joondalup: Fridge and Washer City and

Retravision Warwick: Harvey Norman Electrical Malaga: The Good Guys

Quotes not accepted from Myers, David Jones, Office Works, K-Mart, Big W, Target, Bunnings, other retailers not accepting EFT or 14 day quotes from Dick Smith and JB HIFI

Provide a support letter with all applications

Explain the clients general circumstances i.e. Family composition, income, housing, budget,

purpose for loan, preferred quote, repayment of loan

Explain any exceptional circumstances e.g. Deviation from policies, deductions, child support

income, bank statement transactions, domestic violence, medical

Support Letter

Complete parts A, B, C, D & G

Please sign and date

Loan DocumentsCentrepay Form

Required for all applications

Read the checklist and ensure checkboxes are completed correctly

Loan DocumentsChecklist

Will slow or prevent a lending decision

Documents are required to: provide a clear snapshot of financial position ensure client is not put into financial hardship

WANILS has contractual obligation to WA Government to obtain all relevant information

If documents not all provided...

Keep a full copy of Loan Application

Post original Loan Application to WANILS Please DO NOT staple Loan Applications

Explain approval process may take 4-6 weeks paid to retailer via EFT advised via letter If approved - client keep receipt

Client may want copy of Household Budget

Client should keep WANILS fully informed of: contact details repayment difficulties

Conclusion of Interview

New members welcome

Meet once every 4-6 weeks

1-2 hour meetings

3 members at each meeting (1 member always being the Manager)

Understand the loans process further

Loans Committee

Declined applications may be appealed with reasons

Complete appeal form, submit to WANILS, with supporting documents

Appeal is assessed by another Loans Committee or WANILS Board

Appeals

Our website address is www.wanils.asn.au

Like us on facebook and keep updated

Latest form versions are not yet online (coming soon)

WANILS Website & Facebook

Manager: Shane Dirou – [email protected]

New Loan Enquiries: Shirley Davis - [email protected]

Existing Loan Applications: Michelle Smith: [email protected] Ashlee Peeters: [email protected]

Client Support Officer: Andrea Campbell: [email protected]

Phone: 9354 7611/Fax: 9354 7633

PO Box 282 WILLETTON 6955

WA NILS Contacts

• NAB Product - Low Interest Loan – 3.99%

• Loan amount - Min $800 Max $3000

• Purchase of furniture, white goods, house maintenance, second hand cars, car repairs, medical and dental expenses, vocational costs

• Northern Corridor (Kingsley–Yanchep)• Lucy Tan 0427 101 645 (Tues & Thurs)

Step Up

Loan Write-offs

Loan Default Management

New Website – coming soon

WANILS Latest Developments

$9983 - Dec 2011 (6 months)

$1631 - June 2011 (6 months)

$44,074 - Dec 2010 (6 months)

$46,228 - June 2010 (6 months)

$15,891- Dec 2009 (6 months)

$25,754 - June 2009 (after 8 months)

Loans Written Off

Repayments stop after 0-6 repayments

June 2010 ELDs 52% of total of $46,228

Defaulted and written off after.... 0 repayments $7,284 8 loans 1 repayment $2,725 5 loans 2-3 repayments $4,791 7 loans 4-6 repayments $9,277 18 loans

TOTAL $24,077 38 loans

Early Loan Defaults

Write off erodes loan capital as funds are not replenished

Balance service to clients with loan defaults

Effect of Loans Written Off

Non-performing loans flagged when one repayment missed

Client Support Officer will contact client and / or agent

3 reminder letters

Management of Loan Defaults

Client cancels Centrepay deduction or direct debit. Client changes benefit type. Client not receiving sufficient funds. Clients benefit is cancelled by Centrelink. The Centrepay deduction form is not received by

Centrelink. The Centrepay deduction form is incorrectly

completed. The client is deceased or incarcerated.

Reasons for ceased repayments

Apr to June ’11 Oct to Dec ‘11

Client cancels 36 23

Centrelink cancels 19 8

No form received 7 0

Insufficient funds 6 35

Centrelink delays 30 19

Stats for ceased repayments

Fridge 40

Washer 37

Beds 16

Televisions 12

Lounge 9

Computer 9

Most common goods - defaults

Questions

Thank you for our attendance