HECS-HELP is a loan scheme for eligible students enrolled in Commonwealth supported places to pay their student contribution amounts. It doesn’t extend to additional study costs such as accommodation or textbooks. To help you better understand how HECS-HELP affects you and your taxes, we’ve put together a comprehensive guide to getting to know HECS-HELP.

What is HECS-HELP?

HECS-HELP is both a loan and a student discount. Let’s say you’re an eligible student – the Australian Government (through the HECS-HELP scheme) will pay your course fees for you. If you pay your course fees upfront ($500 or more), you can use the scheme to receive a discount.

The Australian Government will pay the amount of your loan or discount directly to your education institution. Once your income reaches a certain threshold (currently $55,874 for the 2017-2018 financial year), loan repayments are then made through the tax system. If you wanted to pay off your debt faster, you can make voluntary repayments, regardless of how much you earn.

A HECS-HELP debt kicks off immediately after the elected 'census' date for any University course you’ve nominated to receive HELP assistance for.

Am I eligible for HECS-HELP?

To qualify for HECS-HELP, you have to meet the following standards:

  • Be studying in a Commonwealth supported place;
  • Be an Australian citizen; or
  • Be a New Zealand Special Category Visa holder who meets the long-term residency requirements; or
  • Be a permanent humanitarian visa holder;
  • Be enrolled in each unit at your university by the census date;
  • Meet the relevant HECS-HELP residency requirements; and
  • Submit a valid request for Commonwealth support and HECS-HELP form by the census date (or earlier administrative date) to your university.

When do I have to repay my HECS-HELP?

Your HECS-HELP debt repayments will take effect through your taxes once your income surpasses the compulsory repayment threshold, even if you’re still studying.

The minimum Help Repayment Income (HRI) thresholds change each year. To make your loan repayments for 2017-18, the threshold is set at $55,874. Where income exceeds this threshold, a compulsory repayment of at least 4% of your income takes effect as part of your tax assessment. The percentage increases in tandem with your income.

Rates for 2017-18 are as follows:

Repayment Income (RI*) Repayment Rate
 Below $55,874  Nil
$55,874 – $62,238  4.0%
$62,239 – $68,602  4.5%
 $68,603 – $72,207  5.0%
$72,208 – $77,618  5.5%
 $77,619 – $84,062  6.0%
 $84,063 – $88,486  6.5%
 $88,487 – $97,377  7.0%
 $97,378 – $103,765  7.5%
 $103,766 and above  8.0%

From 1 July 2018, a new lower income repayment threshold of $42,000 will be ushered in with a repayment rate of 1%. Higher threshold bands will increase to a top 10% repayment rate on income over $119,882. If you fall into these categories, have a chat to one of our tax consultants.

What is the HECS-HELP repayment income threshold?

Your HECS-HELPrepayment income (HRI) differs from your taxable income. Calculate it like this:

  • Your taxable income for an income year, plus
  • Your total net investment losses, plus
  • Any total reportable fringe benefit amounts shown on your PAYG payment summary; plus
  • Reportable super contributions; and
  • Any exempt foreign employment income from the current income year.

When it comes to tax time, your H&R Block consultant will help you understand and calculate what your HRI threshold is.

How to check your HECS-HELP debt balance

There are three ways to check how much you owe on your HECS-HELP debt balance:

  1. Contact the ATO on 13 28 61, and provide them with your TFN. This way, they can verify your personal details and tell you your HECS-HELP balance.
  2. View your HECS-HELP balance online via the myGov site. If you link your account to the ATO, you’ll be able to see your balance online.
  3. H&R Block’s year round support means our tax consultants can give you an instant update on your HECS-HELP balance and any other tax advice over the phone or in-person.

Repaying your HECS-HELP loan

Compulsory HECS-HELP Repayments

When you start a new job, make a note to let your employer know you’ve got a HECS-HELP debt. Just tick the box on your TAX DECLARATION FORM which you’ll need to fill out before you get to work.

Your employer will set aside additional tax from each pay to cover your estimated HECS-HELP debt based on your annual HRI. Keep in mind, your employer will withhold the additional tax based on the income they pay to you. They won’t factor in other income sources, previous jobs or investments. So, if you’ve got any of these sources of income, you’ll have to make a top-up payment once you lodge your tax return.

Voluntary HECS-HELP repayments

If you like to stay ahead, you can make voluntary repayments anytime to the ATO by BPAY or credit card. Visit the ATO’s website or your nearest H&R Block office for more information on how and when to make repayments.

Tax tips for repaying your HECS-HELP debt

Upfront organisation will save you precious pennies. Keep all work-related receipts and claim deductions for everything you’re entitled to. This can reduce your HRI and minimise your compulsory annual repayment amount. For advice on what you can claim, have a read through our ultimate guide to tax deductions.

Calculate your tax refund with a HECS-HELP debt

Calculate your estimated tax refund including the HECS-HELP debt with our tax calculator tool. If your return is a little more complicated or you’re unsure about what you can and can’t claim, make an appointment with one of our tax consultants.

How H&R Block can help with your HECS-HELP debt

We can spell out exactly what you need to do to get into shape for the tax season and maximise your refund.

 

August 2017

 

Book an appointment

We will help you get your maximum tax refund. Find an office near you and book an appointment online.

Book now

Under 21 or student and need your tax refund asap?

If you are under 21 or a full time student (under 25 years) and need your tax return done, for just $70* H&R Block can do it for you.

Find out more

Estimate your tax refund

Our tax calculator will help you estimate your final tax return summary taking into account your HECs/ HELP debt.

Calculate now

Book an appointment

We will help you get your maximum tax refund. Find an office near you and book an appointment online.

Book now

Under 21 or student and need your tax refund asap?

If you are under 21 or a full time student (under 25 years) and need your tax return done, for just $70* H&R Block can do it for you.

Find out more

Estimate your tax refund

Our tax calculator will help you estimate your final tax return summary taking into account your HECs/ HELP debt.

Calculate now