HELP, HECS & SSL Debt: A Complete Guide to Repayments Through Your Tax
If you have a HELP (Higher Education Loan Program), HECS (Higher Education Contribution Scheme), or SSL (Student Start-up Loan) debt, your repayments are managed automatically through the tax system once your income reaches a certain level. This guide explains how it works, how much you'll pay, and what you need to do at tax time.
What Are HELP, HECS, and SSL Debts?
These are loan schemes set up by the Australian Government to help students pay for their tertiary education.
- HECS-HELP: A loan to help eligible students pay their student contribution amounts.
- FEE-HELP: A loan to help eligible fee-paying students pay their tuition fees.
- SSL: A loan for eligible students receiving Youth Allowance, Austudy, or ABSTUDY Living Allowance to help with relocating and study costs.
While often still called "HECS," the system is now officially known as HELP. For the purposes of repayment, they are all treated the same way.
How Repayment Works: It's Not a Traditional Debt
Your HELP debt is not like a car loan or mortgage. Key features:
- No Repayments Until You Earn Over the Threshold: You only start repaying your debt once your income is above a minimum repayment threshold for the financial year.
- Repayments are Percentage-Based: The amount you repay is a percentage of your income, not a fixed sum.
- Indexed Annually: Your debt is adjusted each year on 1 June in line with inflation (the Consumer Price Index) to maintain its real value. This is not interest, but indexation.
HELP Repayment Income (HRI) & Thresholds
The amount you repay is not based on your taxable income. It is calculated on your HELP Repayment Income (HRI).
How to calculate your HRI:
Your HRI is generally your taxable income plus any of the following you may have:
- Total net investment losses (e.g., rental property losses)
- Reportable fringe benefits
- Reportable super contributions
- Any exempt foreign employment income
This total amount (your HRI) is what the ATO uses to determine if you have reached the repayment threshold and what your repayment rate will be.
HELP Repayment Thresholds & Rates (2024-25 Financial Year)
The repayment thresholds and rates are adjusted each year. Below are the rates for the 2024-25 income year.
| HELP Repayment Income (HRI) | Repayment Rate |
|---|---|
| Below $51,550 | Nil |
| $51,550 - $59,518 | 1.0% |
| $59,519 - $63,089 | 2.0% |
| $63,090 - $66,875 | 2.5% |
| $66,876 - $70,888 | 3.0% |
| $70,889 - $75,140 | 3.5% |
| $75,141 - $79,649 | 4.0% |
| $79,650 - $84,429 | 4.5% |
| $84,430 - $89,494 | 5.0% |
| $89,495 - $94,865 | 5.5% |
| $94,866 - $100,561 | 6.0% |
| $100,562 - $106,593 | 6.5% |
| $106,594 - $112,989 | 7.0% |
| $112,990 - $119,769 | 7.5% |
| $119,770 - $126,955 | 8.0% |
| $126,956 - $134,572 | 8.5% |
| $134,573 - $142,642 | 9.0% |
| $142,643 - $151,191 | 9.5% |
| $151,192 and above | 10.0% |
Example: If your HRI is $70,000, your repayment rate is 3.0%. Your compulsory repayment for the year would be $70,000 x 3.0% = $2,100.
The Process: How Repayments are Made
Your repayments are handled seamlessly through the tax system.
1. Lodge Your Tax Return
You (or your tax agent) lodge your annual tax return as normal.
2. ATO Calculation
The ATO calculates your HRI and determines your compulsory repayment amount.
3. Notice of Assessment
Your Notice of Assessment will show your compulsory HELP repayment amount.
4. Payment Taken
The ATO will use any tax refund you are owed to pay down your HELP debt. If your refund is not enough to cover the full repayment, the outstanding amount will be added to your tax bill, which you must pay by the due date.
5. If No Tax Return is Lodged
If you are required to lodge a return and don't, the ATO may issue a default assessment, which will include a compulsory HELP repayment amount.
What You Need to Do: Key Responsibilities
- Declare Your Debt: When you start a new job, you must answer "YES" to the question "Do you have a Higher Education Loan Program (HELP) or Student Start-up Loan (SSL) debt?" on your Tax File Number Declaration (TFN) form. This tells your employer to withhold additional tax from your pay to cover your anticipated HELP repayment.
- Lodge Your Return: You must lodge a tax return each year if your income is above the tax-free threshold, so the ATO can calculate your obligation.
- Keep Your Details Updated: Ensure your myGov account is linked to the ATO so you can see your HELP debt balance and transaction history.
Making Voluntary Repayments
You can make voluntary repayments to your debt at any time, regardless of your income.
- Benefit: Voluntary payments of $500 or more receive a 5% bonus. For example, a voluntary payment of $500 will reduce your debt by $525.
- How to Pay: You can make a payment easily through your myGov account linked to the ATO.
Strategy Note:
Making a voluntary payment before indexation is applied on 1 June can reduce the balance that gets indexed, saving you money.
FAQs on HELP/HECS Repayment
Q: What if I work two jobs and neither withholder takes out enough for my HELP debt?
A: This is a common issue. If your combined HRI from all jobs exceeds the threshold, but no single employer withheld enough, you may end up with a tax bill. You can use the ATO's withholding variation tool to request one employer take more tax out to cover the shortfall.
Q: I live and work overseas. Do I still need to repay my debt?
A: Yes. If you are an Australian resident for tax purposes living overseas, you have the same repayment obligations. If you are a non-resident, different, often higher, repayment thresholds and rates apply. You must still lodge an Australian tax return.
Q: How can I check my HELP debt balance?
A: The easiest way is through your myGov account linked to the ATO. You can also call the ATO.
Q: Is the repayment amount tax-deductible?
A: No. Compulsory repayments are not a tax deduction. They are a repayment of a debt.
Q: What happens if I don't declare my HELP debt to my employer?
A: If you answer "No" on your TFN declaration but have a debt, your employer will not withhold extra tax. This will likely result in a large tax bill when you lodge your return, as you will have to pay your entire HELP repayment in one lump sum.