If you are one of many people who graduated university with a HELP (Higher Education Loan Program) debt, you may be unsure exactly how and when you are required to repay that debt. If you previously had a HECs (Higher Education Contribution Scheme) debt, that is now also known as a HELP debt.
Repaying your HELP Debt
If you have a HELP debt, you must start repaying it when your repayment income is above the minimum threshold set by the ATO. For the 2010-11 financial year the minimum threshold is $44,912.
Your repayment income is the total of the following amounts obtained from your income tax return:
- Taxable Income
- Any amount your taxable income was reduced by a rental loss
- Reportable fringe benefits
- Any exempt foreign employment income amounts
- Reportable super contributions
For 2010-11, HELP repayment thresholds and rates are listed below:
| Repayment Income || Repayment Rate |
| Below $44,912 || Nil |
| $44,912 - $50,028 || 4% of repayment income |
| $50,029 - $55,143 || 4.5% of repayment income |
| $55,144 - $58,041 || 5% of repayment income |
| $58,042 - $62,390 || 5.5% of repayment income |
| $62,391 - $67,570 || 6% of repayment income |
| $67,571 - $71,126 || 6.5% of repayment income |
| $71,127 - $78,273 || 7% of repayment income |
| $78,274 - $83,407 || 7.5% of repayment income |
| $83,408 and above || 8% of repayment income |
Help your HELP debt along with voluntary repayments
Voluntary repayments are a great way to reduce your overall HELP debt and can be made at any time of the year. And the bonus is, if you make a voluntary repayment of $500 or more, you will receive a bonus of 10% from the Tax Office.
What this means is, your account will be credited with an additional 10% on top of your payment. For example, if your HELP debt is $2000 and you make a voluntary payment of $1000. With the 10% bonus, your account will be credited with $1100 leaving your remaining debt at $900.
- Making a voluntary repayment does not make you exempt from compulsory repayments unless your accumulated HELP debt is nil or your repayment income is below the minimum compulsory threshold.
- Your debt is increased annually in line with the Consumer Price Index on June 1st. This increase is applied to the part of your debt that has remained unpaid for 11 months or more. Therefore, if you make a payment before 1st June and it has enough time to be processed, you won’t be charged interest on the amount you have just paid off.
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