Recovery of overseas HELP and TSL debts
2
New repayment requirements implemented for Higher Education Loan Programme (HELP) and Trade Support Loan (TSL) debts by Australians who are living overseas.
What is the Australian Government doing?
The Australian Government has implemented new arrangements for the repayment of HELP and TSL debts by Australians who live overseas and earn above the minimum repayment threshold. Now, people with a HELP or TSL debt who are overseas will be required to make repayments from 1 July 2017 based on their Australian and foreign-sourced income. This will bring the repayment obligations for overseas residents in line with people with a HELP or TSL debt who remain in Australia.
From 1 January 2016, people with a HELP or TSL debt who leave Australia and intend to be overseas for more than six months, or who have already been overseas for six months will be required to notify the Australian Taxation Office (ATO) using their myGov account.
From 1 July 2017, people overseas who have a HELP or TSL debt will be obliged to make compulsory repayments on their loan if they earn above the minimum repayment threshold, in line with the same arrangements as those who remain onshore. For the 2015-16 financial year, this threshold is $AUD 54,126.
Why is it important?
Recovering student loan debt from overseas residents makes the system fairer for everyone, and will help improve the sustainability of Australia’s income-contingent student loan system.
It now removes the unfair situation where previously, high income earners who lived and worked overseas, faced no HELP or TSL repayment obligations, while those who remained onshore did. At the same time, it protects low income earners by preserving the income-contingent nature of the HELP and TSL repayment arrangements.
By recovering debts from Australians overseas, the Government will save more than $150 million over the ten years to 2024-25, in fiscal balance terms. This will help reduce the cost of HELP to the taxpayer, protect the future of the TSL programme, and help borrowers pay off their debt sooner.
Who does this decision impact?
This decision will impact Australians with a HELP or TSL debt who choose to move overseas for 6 months or more, or those who already work overseas and earn above the minimum repayment threshold. All people with a HELP or TSL debt, both new and current, will be affected by the new repayment obligations.
The Government plans to explore the potential to enter into arrangements to support the recovery of overseas student loan debt, including with countries such as the United Kingdom and New Zealand.
The Department of Education and Training, the Australian Taxation Office and the Department of Immigration and Border Protection will share data to support overseas HELP debt recovery arrangements.
Support for overseas debt recovery
There is strong support for the principle that Australians living overseas and earning above the minimum repayment threshold should repay their student loan debt, not just to reduce the costs of HELP, and to protect the future of the TSL programme, but also as a matter of fairness.
2