The Higher Education Loan Program (HELP) is a loan scheme for eligible students enrolled in Commonwealth supported places to pay their student contribution amounts. HELP helps eligible students not earning a full-time wage to pay for their course fees over time once they are earning above a certain threshold (currently $55,874 in the 2017-18 financial year) as a tax.
The Australian Government will pay the amount of your course fees directly to your enrolled educational institution. The debt is locked in after the “census” date elected by your University or education course nominated for HELP. Your institution will make this date clear to you, so any changes to your course enrolment can be done before that date typically without financial penalty.
To be eligible for the HELP loan scheme you must fulfil the following:
- Study in a Commonwealth supported institution;
- Be a/an:
- Australian citizen;
- New Zealand Special Category Visa holder meeting the long-term residency requirements; or
- Permanent humanitarian visa holder.
- Be fully enrolled in each unit at your institution by the census date.
- Meet relevant HELP residency requirements.
- Submit a valid request for Commonwealth support and HELP form by the census date or earlier.
You will only begin to pay off your HELP debt through your tax repayments once you earn above the compulsory income threshold, even if you are still studying.
When you begin a new job after acquiring HELP, you must tick the box on your Tax Declaration Form you fill out with your contract papers. This way, your employer can set aside additional tax from each pay to cover your debt repayments based on your income from them.
Your repayment threshold differs from your taxable income. Calculated by:
- Your taxable income for an income year, plus
- Your total net investment losses, plus
- Any total reportable fringe benefit amounts shown on your PAYG payment summary; plus
- Reportable super contributions, and
- Any exempt foreign employment income from the current income year.
This repayment threshold changes each year, with the current 2017-18 threshold set at $55,874. Once you earn above this threshold, a compulsory repayment of a minimum 4% takes effect within your tax assessment. This percentage increases in relation to your income bracket.
|Repayment Threshold||Repayment Rate|
|$55,874 – $62,238||4%|
|$62,239 – $68,602||4.5%|
|$68,603 – $72,207||5%|
|$72,208 – $77,618||5.5%|
|$77,619 – $84,062||6%|
|$84,063 – $88,486||6.5%|
|$88,487 – $97,377||7%|
|$97,378 – $103,765||7.5%|
|$103,766 and above||8%|
Note that from 1 July 2018, a new lower income repayment threshold of $42,000 will be implemented with a repayment rate of 1%. Higher threshold bands will increase to a top of 10% repayment rate on income over $119,882. If you fall into these categories, speak with one of our tax experts.
You can also make voluntary contributions regardless of your earnings along the way by BPAY or credit card.
Check Your HELP Balance
There are three ways to check how much HELP debt you still owe:
- Contact the ATO with your Tax File Number. They will verify your identity and tell you your balance.
- View your HELP balance online via the MyGov website. By linking your account to the ATO, you’ll be able to see your balance.
- Online Tax Returns year-round tax support team means our specialists can give you an instant update on your HELP balance.
Supplement Your Payments
Your education repayments will likely be up there with some of the most significant financial decisions you’ll ever make. So it’s important to face your finances with your debt in mind in order to maximise your repayments where you can.
By keeping all your work-related receipts and claiming your eligible deductions, you can reduce your HRI and your compulsory payment amounts.
It’s a great decision to have a team of tax experts on hand to answer any questions you may have. Online Tax Return offers a convenient, fast option for all your tax needs – including a local team, so you’re never alone!
Speak to our team today about your HELP repayments and how we can help.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.