Recovery of HECS debt to commence for Australians living overseas

Hecs Debt Recovery To Commence For Overseas Australians

The government has announced that from 1 July 2017 Australians who have moved overseas for more than six months will be required to repay the same amount of their HECS debt as they would if they were residing in Australia.

The government will introduce legislation that will require all Australian graduates that live overseas to start making HECS repayments based on income for 2016-17 tax year if earning above the threshold $53,000.

Under the current system, Australian’s residing overseas are able to make voluntary HECS repayments to the Australian Taxation Office (ATO) but are not under any legal obligation to do so. For the first time ever, Australian’s who had moved offshore for at least six months will then be ordered to pay back the same HECS debt amount as if they were living in Australia from July 2017.

The Minister for Education and Training, Christopher Pyne stated that “Currently, graduates that live overseas do not have to complete tax return for Australia, there has not been a way to calculate if the graduate has earned more than the threshold to trigger a HECS repayment and therefore many get away with it scot-free. Other graduates return from abroad to find a HECS debt which has accrued interest at CPI rates whilst they were overseas.

“There isn’t a reason why someone that is working as a banker in New York or London and earns over the threshold should not pay back the HECS debt that they owe Australia.” Mr Pyne went on to say that the change is fair for the taxpayer and the individual and is expected to improve the balance sheet for Australia by more than $140 million within the next ten years.

Contact Solve Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.

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