Why Moving Overseas No Longer Lets You Dodge Your HECS Debt

There was a time, not so long ago, when one of the quiet perks of moving overseas was that your HECS debt effectively went to sleep. You’d skip the country, the debt would sit there gathering indexation, and because you weren’t lodging an Australian tax return, nobody was making you pay a cent until you came home (if you ever did). Plenty of graduates treated it as a feature, not a bug.

That era is well and truly over. The government worked out it was leaving serious money on the table, closed the gap, and now your student loan follows you across borders like a determined relative who wants their twenty bucks back. Here’s the story of how that happened, and exactly where the rules stand today, because they’ve changed a lot and a fair bit of what people “know” about HECS overseas is out of date.

The gap that got closed

For years, Australians living overseas with a HECS-HELP debt (or a VET Student Loan, or a Trade Support Loan) had no legal obligation to make repayments while abroad. They could volunteer to pay, but most didn’t, because who volunteers to repay a debt nobody’s chasing? Meanwhile the collective pile of student debt owed to the government swelled into the tens of billions.

So from 1 July 2017, the rules changed. Australians with a study loan living overseas were brought into the same repayment net as those at home, required to report their income and repay based on it, regardless of which country they were earning in. The logic was hard to argue with: why should a graduate earning good money in London or Singapore get a free pass when their old uni housemate, earning the same back in Sydney, has to pay? Fair’s fair.

How the rules work today

Here’s where the current detail matters, because the figures have moved significantly and the whole repayment system was overhauled for 2025-26.

If you live (or intend to live) overseas for 183 days or more in any 12-month period, you have two core obligations. First, you must lodge an overseas travel notification through myGov, generally within 7 days of leaving Australia. Second, each year you must report your worldwide income to the ATO and make a repayment if your income is high enough, even as a non-resident earning entirely overseas.

The thresholds, current for 2025-26: compulsory repayments kick in once your repayment income exceeds $67,000 (up substantially from earlier years). And there’s a separate, lower trigger just for reporting if you’re overseas: you must report your worldwide income once it exceeds $16,750, which is set at 25% of the repayment threshold. So you can be below the repayment threshold but still obliged to report, a distinction that trips people up constantly.

The good news: the system got friendlier

It’s not all stern letters from Canberra. Several recent changes have genuinely eased the burden.

The repayment system shifted to a marginal model from 2025-26. Under the old system, crossing a threshold meant a flat percentage applied to your entire income, a nasty “cliff” where earning one extra dollar could cost you hundreds. Now, like income tax, you only repay a percentage of the income above each threshold, which is fairer and softer for most people. On top of that, balances held on 1 June 2025 received a one-off 20% reduction, knocking a meaningful chunk off many debts. And indexation (the annual inflation adjustment) is now calculated as the lower of CPI or the Wage Price Index, after a nasty spike a few years back made that change politically unavoidable.

So while the obligation to pay from overseas is real and unavoidable, the actual mechanics are more forgiving than they were in the early days of these rules.

What happens if you ignore it

Tempting as it might be to treat the whole thing as optional from the comfort of another hemisphere, don’t. The obligation is legal, not voluntary, and the ATO has steadily ramped up its data-matching and overseas compliance focus. Miss your reporting obligations and you can cop failure-to-lodge penalties, and the debt keeps growing with indexation in the background regardless. The longer it’s ignored, the bigger the eventual mess, and “I was overseas” stopped being an excuse years ago.

If you’ve been abroad a while and have a sinking feeling you’ve not been doing any of this, the sensible move is to get on top of it now, voluntarily, rather than waiting for the ATO to find you. It almost always works out better that way.

Where to go deeper

This piece is the why-and-how overview. We’ve got more detailed companions if you want to go further: a fuller guide to repaying HELP debts as an expat, and a breakdown of your wider HELP debt obligations as an expat, including the difference between voluntary and compulsory repayments and between the reporting and repayment thresholds. Between them they cover the nuts and bolts.

The bottom line

Moving overseas no longer parks your HECS debt; you must report your worldwide income and repay based on it, with compulsory repayments starting at $67,000 and a lower reporting trigger at $16,750 for 2025-26. The system is friendlier than it used to be (marginal repayments, a 20% balance cut, gentler indexation), but the obligation is firm, and ignoring it just builds a bigger problem. Lodge your travel notification, report each year, and treat it as the routine admin it is.

Tread your own path. Just lodge the paperwork on it each year.

Got a HELP debt and living overseas? Let’s keep you compliant.

The reporting rules, the travel notification, the worldwide income calculation and the deadlines are all easy to let slide when you’re busy building a life abroad, but the penalties and the quietly growing balance aren’t worth the risk. We make staying compliant straightforward.

Our specialist expatriate tax team handles HELP reporting and repayments for Australians right across the globe, entirely remotely, so it’s one less thing on your plate.

Book an appointment with our expat tax specialists today and get your HELP obligations sorted. A bit of admin now saves a world of bother later.

General information only. This article doesn’t consider your personal circumstances and isn’t tax or financial advice. Study loan rules and thresholds change regularly. Speak to our specialist expatriate tax team today, or with another registered tax agent, before acting.

References

1. Australian Taxation Office, “Overseas obligations when repaying loans” (the overseas travel notification, worldwide income reporting, and obligations for those living overseas): ato.gov.au
2. Australian Taxation Office, “Study and training loan repayment thresholds and rates” (the 2025-26 minimum repayment threshold of $67,000 and the marginal repayment system): ato.gov.au
3. Australian Taxation Office, “If you live or are travelling overseas” (the worldwide income reporting threshold set at 25% of the minimum repayment threshold): ato.gov.au
4. Universities Accord (Cutting Student Debt by 20 per cent) Act 2025 (Cth) (the one-off 20% reduction to student loan balances as at 1 June 2025): legislation.gov.au
5. Higher Education Support Act 2003 (Cth) (the principal Act under which study loan repayment thresholds and rates are set): legislation.gov.au