What is the HELP Scheme? Our core purpose is “HELPING CLIENTS ACHIEVE FINANCIAL SECURITY’ MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
KEY POINTS •
What is the HELP Scheme?
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Eligibility
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Voluntary & Compulsory Payments
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Repayment Income Thresholds and Rates 2015-16
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be studying in a Commonwealth supported place;
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Recent Changes
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be an Australian citizen; or
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be a New Zealand Special Category Visa holder who meets the long-term residency requirements; or
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be a permanent humanitarian visa holder;
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be enrolled in each unit at your university by the census date; and
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meet the relevant HECS-HELP residency requirements.
WHAT IS THE HELP SCHEME? Whether you are currently studying at university or have already graduated you may be aware of the Higher Education Loan Programme (HELP). The program consists of five loan schemes to assist students with the cost of their tertiary fees; •
HECS-HELP
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FEE-HELP
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SA-HELP
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OS-HELP
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VET FEE-HELP
The loan taken will depend on circumstances and eligibility. For eligible undergraduate students studying at university, HECS-HELP, formerly known as ‘HECS’ is the loan scheme applicable. It is both a student loan and student discount. The loan is interest free; however, the debt will be indexed each year to reflect changes in the Consumer Price Index (CPI) to maintain its real value going forward. The adjustment is made by the Australian Taxation Office on 1 June each year and only applies to the debt that has been unpaid for 11 months or more.
ELIGIBILITY To be eligible you must fit the following criteria:
If you fit the requirements, then you must submit a valid request for Commonwealth Support and HECS-HELP by the census date, or administrative date of your university.
For example: Mark has a loan balance of $4,500 and makes a $1,500 voluntary repayment. With the 10% bonus, the value of his repayment is $1,650 ($1,500 x 1.1). His bonus amount is $150 ($1,500 x 10%) and his loan balance is reduced to $2,850 ($4,500 – $1,650). In contrast, compulsory payments take place when you earn above the minimum threshold. If you earn more than the minimum repayment income, a compulsory payment is made through the income tax system. The compulsory payment will be calculated with the lodgement of your tax return.
REPAYMENT INCOME THRESHOLDS AND 2015-16 RATES The current 2015-2016 repayment income thresholds and rates are shown in the below table:
VOLUNTARY & COMPULSORY PAYMENTS
Repayment Income
Rate
Below $54,126
NIL
While studying you may wish to make voluntary payments to your HECS-HELP debt. Why you may ask? Well those who wish to make payments may be eligible for the HECS-HELP discount.
$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%
The discount allows students to pay less for their studies by making an upfront payment of $500 or more before their university’s census date to receive a 10% discount. It should be noted that the 10% discount will be removed from 1 January, 2017.
$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%
However, the government has proposed a reduction in these thresholds, which will be assessed in the upcoming budget.
IMPORTANT DISCLAIMER: This document does not constitute advice. Clients should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of these areas. This document is issued as a helpful guide to clients and for their private information.
ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU
MULCAHY & CO | P 03 5330 7200 | INFO@MULCAHY.COM.AU | 300B GILLIES ST NTH, BALLARAT
RECENT CHANGES There have been recent changes to the repayment criteria for graduates working overseas and also to the HECS-HELP benefit scheme.
1. The HECS-HELP Benefit The HECS-HELP benefit provides an incentive for graduates from a number of fields of study that take up work in specified locations such as rural and remote areas. This can be applied for through the ATO. Contact Mulcahy & Co today for more info.
2. Changes to Overseas Workers Previously people who held a HECS-HELP loan and then moved overseas were not obliged to make repayments. The Australian Government has now introduced changes to this area. People with a HECS-HELP debt who live and work overseas are now required to make the same repayments as those who live in Australia. This applies if you already live or intend to move overseas for a total of more than six months in any 12-month period. From 1 January 2016, you are required to change your contact details through the ATO within seven days of leaving Australia. If already living overseas, you must update your details no later than 1 July 2017. Worldwide income for the financial year should be submitted to the ATO by 31 October each year.
We offer a free no obligation meeting to review your situation. Call us today on 03 5330 7200 and take advantage of this valuable offer.
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IMPORTANT DISCLAIMER: This document does not constitute advice. Clients should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of these areas. This document is issued as a helpful guide to clients and for their private information.
ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU