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HECS debt repayments and tax time

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HJW
Newbie

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Hi there,

Just after some clarification, as I've been told mixed information from different people.

In this financial year, I've had 1 job for the first half, and now have a different job for the second half. In my new job, my annual income will be over the threshold for HECS repayments, and my employer has been taking out repayments since I started. However, when I have calculated my income for this financial year, with 2 different jobs with 2 different pays, I will be under the threshold for HECS repayments for this financial year. I have been told by someone who has previously had a HECS debt, that at tax time each year while she was earning over the threshold, she would never get a tax refund, it would be automatically taken and put onto her HECS debt. She has said this will happen to me now, because I am now going to be earning over the threshold.

But seeing has I have only been in my new job for 6 months by the time the new financial year starts, and my income from my 2 jobs in this last financial year does not equal the threshold, will I still receive a tax refund this year?

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ATO Certified

Community Support

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Hi @HJW,


Welcome to our Community.


As @macfanboy has explained if your total repayment income is under the threshold no compulsory repayments will be made on your HELP debt.


When you have a HELP debt and your HELP repayment income is above the minimum repayment threshold, when you lodge your income tax return we will work out the compulsory repayment and include it in your notice of assessment if there is an amount to pay.


You may also want to refer to the study and training support loans for more information, or you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday.


I hope this helps

 

 

 

 

4 REPLIES 4

Taxicorn

Replies 3

The money taken out is not used to immediately repay your debt but held as a credit by the ATO until you lodge your tax return at the end of the financial year. Once your correct taxable income and repayment income is known any credit that is not needed to pay back any additional tax payable or government debts will then be used to repay the debt. Any surplus or shortfall will then be credit/debited to you.

Repayment income is calculated from the amounts given on your income tax return for:
your taxable income;
reportable fringe benefits (reported on your payment summary);
total net investment loss (which includes net rental loss);
reportable super contributions; and
exempt foreign employment income amounts.

HJW
Newbie

Replies 2

I dont really understand all that technical jargon, are you saying that any tax money I get from now on will be used to pay back my HECS debt, even if I am under the $51k threshold for this financial year?

Taxicorn

Replies 0

I'll try and simplify it for you.

 

They have taken money from you.

 

If you don't go over the threshold they won't use it for your HECS debt, they can't because you are under the threshold.

 

However, if you have  a Tax Payable (owe money to ato) instead of a Tax refund they will use it for that.

 

If you don't have any debts with Centrelink or the ATO then the extra money will be refunded to you as part of your Tax refund.

 

Best answer

ATO Certified

Community Support

Replies 0

Hi @HJW,


Welcome to our Community.


As @macfanboy has explained if your total repayment income is under the threshold no compulsory repayments will be made on your HELP debt.


When you have a HELP debt and your HELP repayment income is above the minimum repayment threshold, when you lodge your income tax return we will work out the compulsory repayment and include it in your notice of assessment if there is an amount to pay.


You may also want to refer to the study and training support loans for more information, or you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday.


I hope this helps

 

 

 

 

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