HECS and HELP Student Loan Scheme Repayments
The student Higher Education Loan Program (HELP/HECS etc) repayments are recovered by the Tax Office in your annual tax return, based on your annual income.
The repayment rates are set year-by-year and are set out in the tables below.
|repayments 2019-20||repayments 2018-19||repayments 2017-18|
|SFSS repayments||annual indexation %||repayment income|
|voluntary payments and bonus||specific occupations||Further info..|
|Extended thresholds 2019-20 and lifetime caps||Living Overseas – Tax Obligations|
Interest is not charged on the loans, however the amount of the debt is adjusted (increased) on 1 June each year in accordance with an annually determined inflation factor. The year-by-year indexation rates are set out in the tables below – see “Debt indexation“.
Voluntary payment discounts gone from 1 January 2017
Originally flagged by the previous Labor government, legislation has been approved by parliament to remove the bonuses for voluntary and upfront HECS-HELP payments. For further info – see notes below
Long Term New Zealander residents to get HELP
Legislation has been passed to allow access (from 1 January 2016) to HELP loans for New Zealand citizens (Special Category Visa holders) who first entered Australia as a minor and have been in Australia for 10 years, including 8 of the last 10 years, and 18 months of the last 2 years at the time of their HELP application.
Legislation has been passed (see here and here) to require Australian graduates living overseas to make HECS payments based on their income in the 2016-17 and following tax years if they earn above the HELP/TLS income thresholds. Previously any HECS repayment from overseas debtors had been voluntary.
From 1 January 2016 the measures require those going overseas for more than six months to register with the Tax Office. Those already overseas had until 1 July 2017 to register.
As part of the arrangements, registration through myGov will be required to report income to the Tax Office. See the Minister’s media release and further information from the Tax Office here (2018-19).
- The income reporting threshold for 2018-19 is worldwide income of $12,989 which is 25% of the repayment threshold.
Worldwide income in excess of the repayment threshold will trigger a repayment requirement, and part year residents may also be required to lodge a tax return. The deadline for reporting and payments is 31 October.
See further detailed requirements and information here.
Trade Support Loan Scheme
Under the Trade Support Loans scheme from 1 July 2014 eligible apprentices have access to loans totalling up to $20,000 (indexed annually) over the course of their apprenticeship, with the adoption of the HECS/HELP structure for repayments from tax assessments. The Tools For Your Trade grants scheme ceased on 30 June 2014. See further here: Trade Support Loan Program.
From 1 June 2013 the Tax Office no longer automatically issues an annual statement of account for HELP and the Financial Supplement. The information can be obtained via the my.Gov.au website, through a myTax data pre-fill, by a Tax Agent through the Tax Portal or by phoning the Tax Office on 13 28 61.
HECS/HELP Repayment Calculations
As an employee, if you are earning a high enough wage or salary (see thresholds table below) your periodic tax instalments are required to be increased to include a little extra from each pay to repay the HECS or HELP loan.
Tax instalment schedules
Calculated tax instalment deductions for payroll purposes can be calculated from the tax instalment schedules here (including links to printable PDFs).
Any calculated repayment amount for each tax year is also detailed on your income tax assessment, along with the loan balances.
Debt Indexation Factors
The indexation of debt balances is adjusted annually as of 1st of June. The indexation factor is calculated each year to the end of March, and is usually confirmed by May.
As at 1 June each year, indexation is applied to that part of
- the HELP debt which has been unpaid for more than 11 months (applicable from 2006) and
- the HECS debt which had been unpaid for 12 months or more (applicable from 1990 to 2005)
The Help and Financial Supplement Debt indexation calculation to Index an Accumulated Debt for 1 June 2019 to be used in working out accumulated debts for the 2018-2019 financial year indexation percentage is 1.8%.
Indexation Factors – All Years
|HECS – HELP Annual Indexation|
|Year ending 30 June||Percentage|
Thresholds extended and lifetime caps – see the notes underneath this table *
|Income more than or equal to..||..and less than||Repayment rate|
[News May 1, 2017] The Minister Simon Birmingham announced the introduction a new (lower) income repayment thresholds as well as higher threshold bands increasing to a top 10% repayment rate. Initially intended to start from 1 July 2018, the proposed thresholds and rates were by amendment to the Bill modified and deferred until the 2019-20 and later years. The minimum repayment threshold for the 2019-20 financial year moved to $45,881, and the thresholds will be indexed in the years after 2019-20.
|up to $51,957||Nil|
|$51,957 – $57,729||2%|
|$57,730 – $64,306||4%|
|$64,307 – $70,881||4.5%|
|$70,882 – $74,607||5%|
|$74,608 – $80,197||5.5%|
|$80,198 – $86,855||6%|
|$86,856 – $91,425||6.5%|
|$91,426 – $100,613||7%|
|$100,614 – $107,213||7.5%|
|$107,214 and above||8%|
|Repayment income||Repayment rate|
|$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%|
Additionally from 1 January 2019, a combined lifetime limit of $150,000 on HELP will apply to students studying medicine, dentistry and veterinary science courses, and $104,440 for other students. See the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018 (now law).
The calculation of income for repayment purposes has an expanded definition – your repayment assessment is based on your “repayment income“, which is calculated as follows:
= Taxable income plus the following
+ Total net investment loss (which includes net rental losses)
+ Total reportable fringe benefits amounts
+ Reportable super contributions
+ Exempt foreign employment income
= Repayment Income
Income thresholds are inflation-adjusted each year. Additionally, if you are entitled to a Medicare reduction or exemption due to low family income, a compulsory repayment is not required for that year.
Voluntary repayments can be made at any time, but the bonuses for doing so have now been abolished (see below).
Repayment bonuses removed from 1 January 2017
Originally flagged by the previous Labor government, the bonuses for voluntary or upfront HECS-HELP payments are no longer be available after 1 January 2017. Enabling legislation has now been passed by parliament which provides that:
- a person will not receive up-front payment discount for a payment made in relation to a unit of study with a census date on or after the first 1 January 2017.
- a person will not receive the HELP voluntary repayment bonus for voluntary payments made on or after the first 1 January 2017.
The position up to 31 December 2016 was:
- Additional voluntary repayments of $500 or more earn a 5% bonus credit (10% up to 31 December 2011).
- The bonus credit is received for each eligible repayment, or on clearance of the debt balance.
Note: In the 2014 Budget the Government announced that the HECS-HELP benefit scheme will end.
Amending legislation has been passed by parliament which terminates benefits after 30 June 2017 see Budget Savings (Omnibus) Bill 2016 and further details of the phase-out arrangements here.
Time limits: Graduates have a maximum of 2 years after the relevant year to claim the benefit with no extensions permissible. Deadlines are:
|Income year||Application Deadline|
|2016-17||30 June 2019|
|2015-16||30 June 2018|
|2014-15||30 June 2017|
To encourage specific occupations repayment reductions are available for graduates employed in specific occupational areas, with the reduction amounts indexed annually, applied for after the end of the financial year. There is a fixed claim period of 2 years from the end of the financial year.
The purpose of the benefit is designed to encourage graduates into employment in their field. The favoured course types are:
- early childhood education (ECE)
- maths and science
- nursing (including midwifery)
The maximum benefit amounts for each tax year are:
|Income year||Early childhood education||Maths/science||Education and nursing|
- Higher Education Loan Program (HELP) and other student loans: a quick guide (1 May 2017)
- SFSS Repayments
- Work related self education expenses
- Debt cancellation – special circumstances
This page was last modified 2020-01-21