student loans

Expat Australians must now pay back student loans

Update – 9th May 2017: Please note that the Australian government handed down it’s 2017 Australian Federal budget today, with proposals to reduce the HELP debt repayment thresholds. It is expected that this will catch significantly more expats in the HELP debt repayment loop, than was originally proposed in 2015 when the government introduced measures requiring expats to repay their HELP debts from 1st July 2017.

In the 2015 Federal Budget the Australian Government brought in measures requiring expat Australians (who are living overseas and earning above the HELP debt repayment threshold) to repay their HELP debts.

Under this budget measure, a new minimum repayment threshold of $42,000 will be established with a 1% repayment rate. Currently, the minimum repayment threshold for the 2017/18 year is $55,874 with a repayment rate of 4%.

A maximum threshold of $119,882 with a 10% repayment rate will also be introduced. Currently, the maximum repayment threshold for the 2017/18 year is $103,766 with a repayment rate of 8%.

To learn more about these and other 2017 budget measures proposed, take a look at our recent blog post 2017 Australian Federal Budget – Expats the Clear Losers.

Source: Budget Paper No 2, p 83.

Original article below

Expat Australians must now pay back student loans

In January last year, New Zealand police detained a man at Auckland airport for not paying his student loan. Ngatokotoru Puna was a maths teacher and father of five from the Cook Islands. He took a student loan to study in Auckland more than ten years ago. Mr Puna was the first person to be arrested in New Zealand for defaulting his student loan.

While Australian expats with a student loan debt may not face a fate as serious as Mr Puna, settling your Higher Education Loan Programme (HELP) or Trade Support Loan (TSL) is now compulsory even if you are living and working overseas.

From 1 July 2017, students with a loan debt earning an income overseas that is above the minimum repayment threshold for the 2016-17 financial year are legally required to make repayments.

Read on to find out more about new regulations on student loans that could impact your Australian tax return.

1) Notifying the ATO

Any Australian resident with a student loan going overseas to work for six months or more must now notify the ATO before they leave.

If you are already overseas, you have up to seven working days to notify the office.

Notification is simple and can be done online via the myGov service.

From 1 July 2017, non-residents with a student loan debt will have to declare their worldwide income via the myGov online service. They can engage the services of a registered tax agent to help them with your Australian tax return.

Residents with a debt can also go to myGov to lodge their worldwide income or they can engage the services of a tax agent. If your income is above the minimum threshold you will be required to make compulsory repayments.

3) Non-lodgement

Even if you earned below the minimum threshold you are still required by law to submit a non-lodgement advice.

4) What are the penalties for non-compliance?

Non-compliance may be subject to the same range of penalties under the broader taxation law.

Unsure what to do about your expat tax return? Contact Expat Tax services today. We are a professional tax service run by Australians for expat Australians working overseas.

Photo Credit: Cafe Credit via Flickr, under the Creative Commons License

Shane Macfarlane CA
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Comments 4

  1. “If you are already overseas, you have up to seven working days to notify the office”.

    Shane, does the ATO assume overseas Australians know about these changes? I’m overseas and just read about it today by complete accident.

    1. Post

      Hey Matt,

      Thanks for your comment – unfortunately, the ATO does make that assumption sadly. Hopefully the ATO will go easy on penalties for non-compliance in recognition of the fact that many expats simply have not received any formal communications from the ATO regarding these changes.



      1. Thanks Shane. I’m actually moving back to Aust next month having heard NOTHING until this week about the changes. I’m happy to declare my overseas income and make repayments but to face a penalty for not notifying the ATO by July 1st is completely unfair when I received absolutely no notification. I hope you’re right that they’ll go easy. Would it hold any weight with the ATO if an accountant included with my tax return a letter explaining that I received no notification of the changes due to being overseas for 17 years? Matt

        1. Post

          Hi Matt,

          I’d be very surprised if the ATO will penalise you – it is possible, however given that the legislation is so new, I think it unlikely that you’d be penalised.

          Regarding sending in a letter, your accountant would need to do this separately to your taxation return, but even so, there’s no point in doing so until such time that you’ve been penalised. At that time, your accountant would send a letter to the ATO to respectfully request that they remit any penalties to nil. Given that the legislation is so new and given the difficulties that the ATO have had in notifying Aussie expats around the globe, I’d be fairly confident that such a request would be successful.



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