HECS debts

Contributed by AnnetteMorgan and current to 27 July 2018

On 1 January 2005 a new suite of loans known as the Higher Education Loan Programme (HELP) came into effect, introduced under the Higher Education Support Act 2003 (Cth) (or 'HESA'), prior to this date the Higher Education Contribution Scheme (HECS) was in place. All previous HECS debts have now been accumulated into HELP debts.

HELP offers Commonwealth loans to assist students to pay their higher education fees and to study overseas.

The HECS-HELP program allows eligbile Commonwealth supported students to defer their student contribution and repay it later through the taxation system.

You may pay your HECS-HELP debt by one of two methods: up-front or deferred. As from 1 July 2017 there is no longer any discounts available for upfront payments for debts. If you wish to elect to defer payment then the accumulated debts are collectable through the PAYG system.

A certain percentage of your taxable income, as shown below, is collected each year until the debt is repaid. If you, as an employee, complete an employment declaration form you must declare whether you have an accumulated HECS-HELP debt. The HECS-HELP will then be payable by additional tax instalments each pay period, with rates for 2019-20 as in the following table:

Repayment income (RI)	Repayment rate
Below $45,881	Nil
$45,881 - $52,973	1.0%
$52,974 - $56,151	2.0%
$56,152 – $59,521	2.5%
$59,522 - $ 63,092	3.0%
$63,093 - $66,877	3.5%
$66,878 - $70,890	4.0%
$70,891 - $75,144	4.5%
$75,145 - $79,652	5.0%
$79,653 - $84,432	5.5%
$84,433 - $89,498	6.0%
$89,499 - $94,868	6.5%
$94,869 - $100,560	7.0%
$100,561 - $106,593	7.5%
$106,594 - $112,989	8.0%
$112,990 - $119,769	8.5%
$119,770 - $126,955	9.0%
$126,956 - $134,572	9.5%
$134,573 and above	10%

Changes from 1 July 2017 if you live overseas

These changes apply to new and existing HELP and TSL debts and are based on the situation where you live and work overseas and earn worldwide income that exceeds the minimum HELP and TSL repayment thresholds, you will be required to make repayments against your loan.

The two main changes the Australian Government has introduced means you must:

• update your contact details and submit an overseas travel notification if you have an intention to, or already reside overseas, for 183 days or more in any 12 months
• lodge your worldwide income or a non-lodgment advice.

After you have reported your worldwide income, you will receive a notice confirming:

• how much you owe or will be refunded
• the due date for payment.

You can lodge online through ATO online services or through an Australian registered tax agent.

Further information about HECS-HELP can be obtained at https://www.studyassist.gov.au/ or on 13 28 61.