How does the ATO recover HELP debts?
Prior to 2017, Australians with a HELP or TSL debt did not have to repay anything while they lived overseas. Unsurprisingly, with so many young Australians skipping off to travel the world and work overseas for years at a time, this had to change. Now, any Australians living overseas for more than 6 months, with a HELP debt, must repay it from wherever they are overseas.
Will you need to repay your debt while you’re away?
There is, of course income criteria to meet before the ATO’s overseas HELP debt recovery program clicks into play. So for it to affect you will you’re living overseas, you need to meet the following criteria:
- Have a HECS/HELP (Higher Education Loan Program) debt
- Have lived overseas for more than 6 continuous months
- Earn the equivalent income above the HELP repayment threshold ($45,881).
How to pay from overseas
You should notify the ATO via MyGov that you live overseas if:
- You have a HELP or TSL debt, and
- Leave Australia to work overseas for more than 6 months.
Even if you’re not earning Australian income, you still need to lodge a tax return each year to advise the ATO of your total ‘worldwide’ income. If you meet the criteria, the ATO will issue you a request for payment.
Penalties can apply for those who continue to avoid the “overseas help debt” recovery program. If you don’t disclose your income information, the ATO can issue fines of up to $3,600 when you return to Australia.
If you already live overseas and have any outstanding tax returns you should get up to date as soon as possible. The last thing you want is to have to ATO chasing your for unpaid taxes. And they will catch up with you.
Voluntary payments help reduce your debt
You could also consider making additional voluntary HELP repayments. This will lower your overall HELP debt and consequently, lower the compulsory repayment and interest levied by the ATO.