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Living overseas with a HELP debt will cost you

Article By Adam Hurwood | | Accounting & Tax

From 1 July 2016, Australians living overseas are required to repay their HELP (formerly HECS) debt under the same income test as Australian residents. It is important to act now, as the first payment is due soon!

Prior to 30 June 2016, only Australian tax residents were required to make compulsory repayments towards their Higher Education Loan Programme (HELP) or Trade Support Loan (TSL) debt. However, with increasing number of individuals moving overseas, the outstanding HELP debt carried by the government has reached an all-time high. In an effort to collect these debts, the 2015 budget introduced (now legislated) the requirement for all eligible individuals living overseas to make compulsory HELP repayments based on their worldwide income.

Am I liable?
From 1 July 2016, individuals meeting the criteria below will be required to make compulsory debt repayments:

– Have an existing HELP or TSL Debt
– Reside overseas for more than 6 months in any 12 month period
– Earn/expect to earn a worldwide annual income above the HELP repayment threshold (A$54,126 in the 2016/17 tax year).

What do I have to do?
Australians leaving Australia with a HELP or TSL liability will need to register their international residential and email addresses with the ATO before flying out. Individuals already living overseas with a HELP or TSL debt, have until 1 July 2017 to notify the ATO their details.

You will then be required to self-assess and submit to the ATO your worldwide income for the 2016/17 tax year by 31 October 2017. With submission due on the 31 October, every year after until the debt is paid off in full. Any unreported or unpaid amounts will be payable upon return to Australia.

All registrations, lodgement and payments in relation to the “overseas HELP debt recovery program” will need to be completed through your myGov account. Unless you have an Australian mobile phone with you overseas, it is recommended you turn off the security code setting in your myGov account.
If you would like more information, please contact your Altitude Adviser.

Written by Miriam George