35. Repaying HELP loans and indexation arrangements

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35.1 - Compulsory repayments/Overseas levy

A person becomes liable to make a compulsory repayment towards their HELP debt when their repayment income is above the minimum repayment threshold for the income year. These repayments are made through the taxation system.

Repayment income is the total sum of the following amounts from a person’s income tax return for the income year:

  • taxable income
  • total net investment loss
  • reportable fringe benefits (as reported on their payment summary)
  • total net investment loss (which includes net rental losses)
  • reportable super contributions; and
  • any exempt foreign employment income amounts [HESA Subdivision 154-A]

The amount a person repays each year is a percentage of their repayment income [HESA Subdivision 154-B]. The department publishes repayment rates in the information booklets and on the Study Assist website.

Similarly, an overseas debtor becomes liable to pay a levy when their assessed worldwide income is above the minimum repayment threshold for the income year [HESA Subdivision 154-AA].

For further information on overseas obligations, see the ATO website.

35.2 - Voluntary repayments

A person can make a voluntary repayment towards their HELP debt at any time to the ATO [HESA Division 151].

35.3 - Tax deductibility of repayments

Students may not claim a tax deduction for repayments they make on their HELP debts. If a student’s employer makes repayments for the student, the employer may be able to claim a tax deduction. However, the employer will be liable for fringe benefits tax on the repayments.

35.4 - Indexation of outstanding HELP debts

HELP debts are indexed annually [HESA section 154-25] to maintain their real value, by adjusting them in line with changes in the cost of living as measured by the consumer price index, otherwise they are interest-free. The indexation adjustment is made by the ATO on 1 June each year and applies to the portion of debt that has remained unpaid for more than 11 months.

35.5 - Re-crediting HELP balances

Since 1 July 2019, any repayment a student makes towards their HELP debt with the ATO will credit their available HELP balance, up to their applicable HELP loan limit [HESA section 128-25].

Any voluntary repayments a student makes will credit their HELP balance when the ATO notifies the department that a repayment has been made. Any compulsory repayments will credit a student’s available HELP balance once:

  • they have completed their tax return
  • have been issued a notice of assessment; and
  • the ATO notifies the department of a repayment being made

A student’s fortnightly PAYG repayments will not credit their available HELP balance until they complete their tax return and it is processed by the ATO. A student can view their repayments and study history from 1 January 2020 via the myHELPbalance website.