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Re: HECs Exemption

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Newbie

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Hi, I have a client who is currently working in the Australian Defence Force, and is therefore exempted from the Medicare Levy (taxpayer receives full free medical treatment). This taxpayer also has a HECS debt and his income threshold has put him into the repayment of HECS for the 30 June 2020 financial year. My understanding is that this taxpayer is also exempt from repaying their HECS debt as an employee of the ADF? Can you please confirm this is correct and if so, will this be picked up on lodgemetn of the taxpayers tax return as an exemption and no repayment required? (I note a small $31 income has been also received by the taxpayer from other employment services not related to the ADF, would this afect the tax calculation?)

Regards

 

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Hi @BESellars,

 

Further to what @WainWright has said, our website states that:

You will not have to make a compulsory repayment if you have a spouse or dependants and if (due to low family income) you:

  • are entitled to a reduction of the Medicare levy
  • do not have to pay the Medicare levy.

While being a member of the ADF is one of the reasons for medicare levy exemption, only the low family income exemption reason applies for HECS (HELP) repayment purposes.

 

Hope this helps.

RochL

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Community Support

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Hi @BESellars ,

There are some allowances available to children of members of the Australian Defence Force. You can consider applying for these Education Schemes through the Department of Veteran Affairs.

 

There is mention of a HELP fee loan exemption for some students studying in Semester 2020, due to covid-19 - see section, 'Loan fee exemption' (as per Fee Help). I cannot find any reference to an exemption to Australian Defence personnel in repaying their study loan unfortunately. The 2019-20 repayment thresholds are available in the above linked webpage.

 

In reference to the $31 (as mentioned), all assessable income needs to be recorded in an individual tax return eg salary/wages, and this will affect the repayment income for HECS-HELP repayment purposes.

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Most helpful response

Community Support

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Hi @BESellars,

 

Further to what @WainWright has said, our website states that:

You will not have to make a compulsory repayment if you have a spouse or dependants and if (due to low family income) you:

  • are entitled to a reduction of the Medicare levy
  • do not have to pay the Medicare levy.

While being a member of the ADF is one of the reasons for medicare levy exemption, only the low family income exemption reason applies for HECS (HELP) repayment purposes.

 

Hope this helps.

RochL