What is HECS-HELP?

HECS-HELP has two components - it is both a loan and a student discount.

For example, if you are an eligible student, the Australian Government (through the HECS-HELP scheme) will pay your course fees for you, or if you pay your course fees upfront (if $500 or more) you can use the scheme to receive a discount.

The Australian government pays the amount of the loan or discount directly to your education institution. 

Loan repayments are then made through the Australian taxation system when your income reaches a certain threshold (currently $54,869 for 2016-2017 financial year, as at April 2017). It is possible to make voluntary repayments at any time regardless of income. 

A HECS-HELP debt is incurred immediately following the elected 'census' date for any University course you have nominated to receive HELP assistance for.

Am I eligible for HECS-HELP?

To qualify for HECS-HELP, you must:

  • 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 supoort and HECS-HELP form by the census date (or earlier administractive date) to your university.

When do I need to start repaying my HECS-HELP loan?

Repaying you HECS-HELP debt commences once your Help Repayment Income (HRI) is above the minimum repayment threshold for compulsory repayment. That is, once your taxable income reaches a certain level.

The HRI thresholds are adjusted each year.

The minimum HRI threshold to make a loan repayment for 2016-17 is $54,869. In 2015-16 it was $54,126. Where income exceeds this threshold, a complusory repayment of at least 4% of your income is raised in your income tax assessment. The percentage increases as your income increases.

Rates for 2016-17 are as follows:

Repayment Income (RI*) Repayment Rate
 Below $54,869  Nil
 $54,869 - $61,119  4.0%
 $61,120 - $67,368  4.5%
 $67,369 - $70,909   5.0%
 $70,910 - $76,222  5.5%
 $76,223 - $82,550  6.0%
 $82,551 - $86,894  6.5%
 $86,895 - $95,626  7.0%
 $95,627 - $101,899  7.5%
 $101,900 and above  8.0%

 

What is HELP Repyament Income (HRI)?

Your repayment income is different to your taxable income. It is calculated as:

  • 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. 

How to check your HECS-HELP debt balance

There are two main ways to check your HECS-HELP debt balance:

  1. contact the ATO on 13 28 61, and provide them with your TFN. With this they are able to verify your personal details and tell you your HECS-HELP balance or
  2. view your HECS-HELP balance online via the myGov site. You will need to link your account to the ATO so they have all the details. From here, you view your balance online. 

How to repay you HECS-HELP debt though the taxation system 

Compulsory repayments

When commencing a new job make sure you indicate to your employer that you have a HECS-HELP debt. This is done by ticking a box on the TAX DECLARATION FORM you will complete before starting work. 

Your employer will withhold additional tax from each pay to cover your estimated HECS-HELP debt liability based on your annual HRI. The additional tax withheld by your employer should cover this repayment. 

NOTE: Your employer only withholds the additional tax based on the income THEY pay to you. They won't take into account other income - from second or previous jobs or investment for instance - so you may have to make a top-up payment once you lodge your tax return. 

Voluntary repayments

You are able to make voluntary repayments to your debt at any time to the ATO by BPAY and credit card. Visit the ATO or your nearest H&R Block office for more information about how to make repayments and the best time to do so. 

Tax tips for repaying your HELP debt

Keeping receipts and claiming deductions for everything you’re entitled to can reduce your HRI and minimise your compulsory annual repayment amount. It is important to keep all work related receipts and to take advice on what you can claim in order to maximise your refund. Read our ultimate guide to tax deductions.

If you are working more than one job, each employer will only withhold additional tax to cover your HECS-HELP debt based on the income that they pay you. If your combined income from multiple employers is over the minimum repayment threshold, you will still be liable to make a repayment towards your HECS-HELP debt when you lodge your tax return. 

Calculate your tax refund

Calculate your estimated tax refund including the HECS-HELP debt with our tax calculator tool.

H&R Block can help

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

This information sheet is intended as a guide for H&R Block clients. All actual detail and circumstances differ, please discuss your situation with a H&R Block Tax Consultant.

May 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