This is a new service – your feedback will help us to improve it.

  • 75 Online
  • 9186 Members
  • 14615 Posts

Re: FHSS - Commonwealth Debt

Reply

I'm new

Views 731

Replies 9

Hi,

The ATO web page on FHSSS states the following:

 

Receiving your amount

We will issue a release authority to your super fund/s requesting they send your FHSS release amounts to us.

It will take approximately 25 business days for your fund to release your money and for us to pay it to you.

Before we send the balance of the released amount to you we will:

  • withhold the appropriate amount of tax
  • offset the remaining amount against any outstanding Commonwealth debts.

 

Is HECS-HELP debt considered a Commonwealth debt?

1 ACCEPTED SOLUTION

Accepted Solutions

Best answer

ATO Certified

Community Support

Replies 4

Hi @Kellyboi,

 

Welcome to our Community!

 

Generally speaking, a Commonwealth debt is a debt owing to a government department such as Centrelink and Child support or an income tax or business activity statement debt. A HECS-HELP debt relates to study and training support loans to help individual's complete further training and study.

 

If you have further questions regarding the FHSS scheme, you can phone us on 13 10 20, or for queries about HECS- HELP, you can phone 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator. 

 

Thanks, JodieH. 

9 REPLIES

Best answer

ATO Certified

Community Support

Replies 4

Hi @Kellyboi,

 

Welcome to our Community!

 

Generally speaking, a Commonwealth debt is a debt owing to a government department such as Centrelink and Child support or an income tax or business activity statement debt. A HECS-HELP debt relates to study and training support loans to help individual's complete further training and study.

 

If you have further questions regarding the FHSS scheme, you can phone us on 13 10 20, or for queries about HECS- HELP, you can phone 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator. 

 

Thanks, JodieH. 

I'm new

Replies 3

Sorry, I am still confused. Can you please clarify if a 'HECS-HELP debt' is classed as a 'Commonwealth Debt' or not? 

 

TIA. 

Community Support

Replies 2

Hi @Paige12345,

 

Thanks for posting!

 

A Commonwealth debt liability may include the following debts:

  • income tax
  • integrated client account, and
  • child support.

FHSS amounts will not be offset against higher education (for example, Higher Education Loan Program or Student Financial Supplement Scheme) or trade support account balances the client may have.

 

Thanks, JodieH.
 

 

Newbie

Replies 1

Hi All,

 

Are overdue fines with Fines Victoria treated as Commonwelath Debt when applying for release of the FHSS?

Moderator

Replies 0

Hi @Gerald,

 

Thanks for posting.

 

@SebReiter has provided a great response to this question on your other post.

 

Thanks, NicM.

Devotee

Replies 3

Just to add some additional context to this post - the HECS / HELP amount that someone owes isn't a tax debt so a tax credit (such as an FHSS amount) won't be applied against the remaining HECS / HELP amount.

 

However - people with a HECS / HELP amount are required to repay a specified part of that amount depending on how much they've earned in a financial year.

 

For example, someone may have a total HECS amount of $20,000 still to repay. Based on their income in the current financial year they're required to repay $2,000 this year.

 

If for some reason the employer doesn't withhold the additional $2,000 tax from the person's income during the year, and the person ends up with a $2,000 bill to pay after lodging their income tax return, and they don't pay this bill by the time it's due to be paid - then the amount will become a tax debt and a tax credit such as an FHSS amount WILL be used to clear that debt.

 

I'm an ATO employee voluntarily providing my time here

I'm new

Replies 2

Thanks @SebReiter that was super helpful

 

I have a HELP debt that my current job that, for the first time, passed the salary threshold for automatic payment. However, with the voluntary contributions now coming out of my pay this financial year, I have dropped below the threshold again and HELP payment has stopped.

 

Is the voluntary contribution actually counted as income, in the long run, meaning I will need to pay back the currently halted HELP payments as a lump sum in my  18/19 Tax return?  Do I need to speak to my employer about calculating the HELP payment before the voluntary contributions?

 

Thanks

Emily

 

 

Highlighted

Devotee

Replies 0

Hi EmilyMilne

 

The answer is probably yes.

 

The income used for HELP repayment rates is Reportable Income (scroll to bottom of page). This starts with taxable income then adds in a few things, most relevantly reportable super contributions.

 

Reportable super contributions include personal contributions to super for which the individual claims a deduction in their income tax return, and also include salary sacrifice contributions to super.

 

So by making the personal contributions your taxable income will have reduced but your reportable income won't have, so the amount of HELP repayment will be the same.

 

If I've understood what you're asking and the above reflects your situation then I reckon it's definitely worth having your employer withhold additional tax from your pay if you want to avoid having to pay the additional amount after you lodge your tax return.

 

I'm an ATO employee voluntarily providing my time here

Newbie

Replies 0

Hi Emily,

Your voluntary contributions will reduce your taxable income, however, your HELP debt is calculated against your total gross income.

For the purpose of HELP debt your voluntary contributions will not reduce your income.

You will pay a percentage of your total income to your HELP. You can find the threshold tables on the ATO website. Google: HELP repayment thresholds.

These may be relevant to you:
$51,597.00 - $57,729.00 = 2%
$57,730.00 - $64,306.00 = 4%

Scenario:

Gross income: $60k
Voluntary contribution: $15k

Taxable income: $45k

HELP Fee: $60k x 4%
= $2,400.00
Top Solution Authors