Repayment of HELP and TSL Debts while Overseas
Until 2017, Australians proceeding overseas with a HELP (Higher Education Loan Program) or TSL (Trade Support Loan) debt were not required to continue making repayments, and would only begin compulsory repayments once they became resident again in Australia - with the debt attracting no interest in the meantime, but continuing to increase with inflation.
However, significant changes were announced in 2016 regarding the repayment responsibilities of expatriate Australian, summarised as follows:
1.From 1 January 2016, Australians with a HELP or TSL debt have been required to update their contact details and submit an overseas travel notification if they intend to reside overseas, for 183 days or more, in any 12 month period. As above, these details can be lodged online through your myGov account, and these contact details need to be kept current.
2. From 1 July 2017, if you are living overseas and earning an income that exceeds the minimum repayment threshold, you are required to make compulsory repayments towards your debt. In this context, you need to lodge an annual advice regarding your worldwide income, or a non-lodgement advice, through your myGov account or an Australian registered tax agent. The due date for lodging returns personally is October 31 - tax agents are able to lodge after this deadline but clients need to be listed on the tax agent's client roll before October 31 to qualify for later lodgement.
Despite these changes having now been made several years ago, we believe that there are still a substantial number of expatriate Australians who are not making required HELP/TSL repayments, probably because of the perceived "hassle factor". That is a mistake, substantial penalties can apply and it is strongly recommended you discuss your position with the tax advisor as soon as possible.
The table below provides details regarding current repayment thresholds and an indication of those applicable from July 1, 2019 - next years repayments have a markedly lower commencement threshold of $45,000, but start with a 1% payment rate.
HELP/HECS/TFL Repayment Rates
|Below $51,957||Nil||Below $45,000||Nil|
|$51,957 - $57,729||2.0%||$45,000 - 51,956||1.0%|
|$57,730 - $64,306||4.0%||$51,957 - $55,073||2.0%|
|$64,307 - $70,881||4.5%||$55,074 - $58,378||2.5%|
|$70,882 - $74,607||5.0%||$58,379 - $61,881||3.0%|
|$74,608 - $80,197||5.5%||$61,882 - $65,594||3.5%|
|$80,198 - $86,855||6.0%||$65,595 - $69,529||4.0%|
|$86,856 - $91,425||6.5%||$69,530 - $73,701||4.5%|
|$91,426 - $100,613||7.0%||$73,702 - $78,123||5.0%|
|$100,614 - $107,213||7.5%||$78,124 - $82,811||5.5%|
|$107,214 +||8.0%||$82,812 - $87,779||6.0%|
|$87,780 - $93,046||6.5%|
|$93,047 - $98,629||7.0%|
|$98,630 - $104,547||7.5%|
|$104,548 - $110,820||8.0%|
|$110,821 - $117,469||8.5%|
|$117,470 - $124,517||9.0%|
|$124,518 - $131,988||9.5%|
The ATO page below provides some more detail in terms of how to prepare the required income statements and there is an understanding that different countries will have different tax years. You will either need to request an extract from the payroll department of your employer, seeking details of income earned from July 1 to June 30, or base your statement on your monthly salary statements.
Secondly, note that within the above-referenced there is a link at the bottom of the page to a foreign currency calculator which will convert your foreign income to AUD.