HECS – HELP
The Australian government provides financial assistance to individuals undertaking higher education, trade apprenticeships and other training programs. Higher Education Loan Program (HECS-HELP) debt is to be repaid once an individuals repayment income exceeds the compulsory repayment threshold ($47,014 for the 2021-22 Financial Year). Compulsory repayments are automatically calculated by the ATO through the income tax system at the end of each financial year. Minimum repayment amounts are calculated as a percentage (repayment rate) relative to an individual’s repayment income bracket. Repayment income (RI) is taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefit amounts, reportable super contributions, and exempt foreign employment income. Individuals may elect to make voluntary repayments to reduce the loan balance faster.
The 2021-22 repayment income thresholds and rates are as follows:
Repayment income (RI) | Repayment rate |
Below $47,014 | Nil |
$47,014 – $54,282 | 1.00% |
$54,283 – $57,538 | 2.00% |
$57,539 – $60,991 | 2.50% |
$60,992 – $64,651 | 3.00% |
$64,652 – $68,529 | 3.50% |
$68,530 – $72,641 | 4.00% |
$72,642 – $77,001 | 4.50% |
$77,002 – $81,620 | 5.00% |
$81,621 – $86,518 | 5.50% |
$86,519 – $91,709 | 6.00% |
$91,710 – $97,212 | 6.50% |
$97,213 – $103,045 | 7.00% |
$103,046 – $109,227 | 7.50% |
$109,228 – $115,781 | 8.00% |
$115,782 – $122,728 | 8.50% |
$122,729 – $130,092 | 9.00% |
$130,093 – $137,897 | 9.50% |
$137,898 and above | 10.00% |
Individuals with an outstanding HECS debt that have since moved and/or are living overseas are still required to make any compulsory repayments, equal to repayments made if they were still living in Australia.
In the case that a deceased person has an outstanding HECS debt, the individual will only make any compulsory repayments for the period up to the date of their death. A trustee or executor of their estate will need to ensure that these compulsory repayments are made. The remaining outstanding HECS debt is voided upon death.
Author
Jordan Chadwick