Until now, Australian expats with HECS (HELP) or TSL debts didn’t have to repay the loans while they’re living and working abroad. This, however, is now all coming to an end and all Australian expats with HECS or TSL debt must be aware of the changes.
What has changed?
Legislation has been passed that means from 1 Jan 2016, Australians with HECS or TSL debts planning to work abroad for more than 6 months must register with the Australian Tax Office (ATO) with your mygov account. You can find out more about this on the ATO website here.
Australian expats who are already working overseas will have until 1 July 2017 to register the fact that they’re working overseas. People with HECS debt will now need to submit an income self-assessment each year and the same minimum threshold of A$54,126 that applies to Australian residents, will apply to expats. This means that once you exceed this threshold, you will be required to repay your student debts just as Australian residents would be.
What do you need to do?
From the start of 2016, any Australian with HECS or TSL debt planning to live and work offshore for more than 6 months will need to notify the ATO with their myGov account.
From 1 July 2017, people with HECS or TSL debts will need to lodge a self-assessment of their global income and submit these details. This will be due by the 31st October, as is your Australian tax return. Failures to register and comply with these new rules will likely result in significant fines and other penalties.
How will the Government benefit?
The Australian government expects that it will boost its coffers by over $150 million over a 10 year period. The key benefit here is that it will increase the sustainability of the HELP/TSL system, reduce the cost of the system to the taxpayer and also encourage borrows to repay their debt.
If you’re an Australian expat with HECS or TSL debt, it’s important that you comply with the above new rules and ensure that you’re not facing unexpected penalties for non-compliance.
If you have any questions about complying with these new rules, please feel free to contact us.
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Jarrad Brown is the trusted fee-based financial adviser for Australian expatriates living in Singapore and throughout Asia-Pacific.
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