How Expats Can Save On Their HECS/HELP Debt – Every year the HECS/HELP student debts are subject to an adjustment for inflation on 1 June and since 2017 Australian expats are required to continue making payments towards their student debts even when living overseas.
In recent history prior to 2022, with inflation at consistent lows these adjustments have been minor. In 2022 we saw a reasonable 3.9% indexation jump, although we are seeing greater concern in the market with the 2023 indexation adjustment being 7.1%.
| Year | Indexation rate |
| 2023 | 7.10% |
| 2022 | 3.90% |
| 2021 | 0.60% |
| 2020 | 1.80% |
| 2019 | 1.80% |
| 2018 | 1.90% |
| 2017 | 1.50% |
| 2016 | 1.50% |
| 2015 | 2.10% |
| 2014 | 2.60% |
| 2013 | 2.00% |
From the 2018 financial year, expats working outside Australia will need to report their worldwide employment income if they have a HECS/HELP debt, and will be required to make a payment if their income is above the relevant repayment threshold.
Many Australian expats who are in a financial position to make voluntary repayments to their debt are choosing to do so prior to 1 June 2023 to avoid this indexation.
This is particularly the case for those who are nearing paying off their debt and would likely be required to repay the balance in their 2023 tax return regardless.
This effectively gives a saving of 7.1%.
| HECS/HELP Balance 31 May 2023 | Increase on 1 June 2023 |
| $5,000 | $355 |
| $10,000 | $710 |
| $15,000 | $1,065 |
| $20,000 | $1,420 |
| $25,000 | $1,775 |
| $30,000 | $2,130 |
| $35,000 | $2,485 |
| $40,000 | $2,840 |
| $45,000 | $3,195 |
| $50,000 | $3,550 |
| $55,000 | $3,905 |
| $60,000 | $4,260 |
It is important to note a voluntary payment does not replace the mandatory payment required, so you will still need to pay the mandatory payment on any HECS/HELP debt that remains after your voluntary payment.
If you completely repay your debt then no further repayment is required, and in many cases no foreign disclosure is required, often meaning Australian expats don’t have an ongoing reporting obligations to the ATO.
If you were considering making a voluntary payment prior to 1 June and/or had outstanding return disclosures and wanted to discuss with us, please contact us, noting your matter is urgent.