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 10% discount.

The government pays the amount of the loan or discount directly to your education institution. Please note: the HECS-HELP 10% discount will be removed from 1 January 2017.

Who is eligible for HECS-HELP?

According to the Government's Study Assist website the criteria for HECS-HELP eligibility is as follows:

  • 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.

When do I need to repay my HECS-HELP loan?

You need to start paying off your HECS-HELP loan once your taxable income reaches a certain level (called Repayment Income). Repayment rates are set for each Repayment Income threshold (see table below)

A HECS-HELP debt is incurred immediately after the census date for each course of study for which students have received assistance.

Repayment Income is calculated as taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income.

The minimum Repayment Income 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 compulsory repayment of at least 4% of the Repayment Income is raised in the your income tax assessment.

The HECS-HELP Repayment Rates for 2016/17:

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%

How to check your HECS-HELP debt balance

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

  1. Contact the ATO directly and advise them of your TFN. This way they can verify your personal details and advise of your HECS-HELP balance.
  2. Or you can view your HECS-HELP balance online via the myGov site. To do this you will need to link your account to the ATO so they have all the details. Then you can just follow the links to see your balance.

How to repay your HECS-HELP debt

There are two ways to repay your HECS-HELP debt.

Compulsory repayments

Compulsory repayments are made through the income tax system. When you lodge a tax return the ATO will calculate your compulsory repayment and it will be on your notice of assessment.

Compulsory repayments can be managed through your employer. Make sure that when starting a new job you tell your employer you have a HECS-HELP debt by ticking the box on your tax declaration form. Your employer will withhold additional tax from each pay to cover your estimated HECS-HELP debt liability based on the income they pay you. The additional tax withheld by your employer should cover your required loan repayment. However, remember this does not include other income that you may earn.

Voluntary repayments

You can make voluntary repayments at any time to the ATO by BPAY and Credit Card. Visit the ATO for more information about how to make voluntary repayments and the best time to do so.

Tax tips for repaying your HELP debt

Keeping receipts and reducing your Repayment Income threshold can mean that you could reduce your compulsory repayment amount. It is important to keep all work related receipts and track your 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 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 the tax calculator tool. Calculate how much here.

 

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

June 2016

 

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Estimate your tax refund

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

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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