Australia: New System for Higher Education Loan Repayment (HELP and TSL) for Overseas Earners Commences

Jane Cooper 1 January, 2016

In the 2015 Federal Budget in Australia legislation was passed to require Australian graduates living overseas to make repayments of debts arising under the Higher Education Loan Programme (HELP), or a Trade Support Loan (TSL) based on their income in the 2016/17 tax year if they earn above the HELP/TLS income thresholds.

Previously repayments have been made on a voluntary basis.

The measures require those going overseas for more than six months from today – the 1st of January, 2016 – to register with the Australian Tax Office.

Those who are already overseas with a HELP or TSL debt have until the 1st of July, 2017 to register.

People who are overseas with a HELP or TSL debt will then be required to make repayments from the 1st of July, 2017 based on their worldwide income, from the 2016/17 financial year.

This will bring repayment obligations for those with overseas income in line with people with a HELP or TSL debt who are in Australia and who earn above the repayment threshold. For the 2015/16 tax year, the threshold is A$54,126.

Those with a current HELP or TSL debt – including those who have already graduated from study and who are still paying off their debt – should register for a myGov account and link their account to the ATO.

From the 1st of July, 2017, people working overseas with a HELP or TSL debt will be required to self assess the income they have received in the 2016/17 Australian tax year and to submit the details of their worldwide income to the ATO via their myGov account.

The self assessment will be due by the 31st of October each year, in the same way as for Australian residents lodging tax returns without the support of a registered tax agent.

Repayment rates for the current 2015/16 tax year are as follows:

Repayment Income / Rate
Below $54,126 / nil
$54,126 to $60,293/ 4%
$60,294 to $66,457 / 4.5%
$66,458 to $69,950 / 5%
$69,951 to $75,191 /5.5%
$75,192 to $81,433/ 6%
$81,434 to $85,719 / 6.5%
$85,720 to $94,332 / 7%
$94,333 to $100,520 / 7.5%
$100,521 and above / 8%

See also the Australian Government’s webpage here.