Removal of the HECS-HELP discount and voluntary repayment bonus
From 1 January 2017, the Australian Government will remove the upfront HECS-HELP discount of 10% for eligible students that pay their student contributions upfront and remove the voluntary HELP repayment bonus of 5%. The removal of the upfront discount only affects students who can afford to pay upfront, but the bonus for voluntary repayments impacts all past and present students who want to minimise their HELP debt.
Currently, people who have a HELP debt and make a voluntary repayment of $500 or more towards that debt currently receive a bonus of 5%. The amount of the bonus is an additional credit against an individual’s outstanding HELP debt. It is an amount never recovered by the Government.
If you wish to take advantage of the 5% bonus of voluntary repayment of your HELP debt, you need to make sure that your payment reaches the ATO by the 31st December 2016. It is important to note that the ATO will be closed from midday 23 December 2016 until 3 January 2017, meaning that their systems may be non-operational during this time.
We can help you confirm your current HELP debt, confirm your ‘payout’ amount if you wish to make a lump sum payment to repay your debt in full and provide instructions on how to make the voluntary HELP payment.
If you have any questions or enquires, please contact
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au
“From 1 January 2017, the Australian Government will remove the upfront HECS-HELP discount of 10 % for eligible students who pay their student contributions upfront and remove the voluntary HELP repayment bonus of 5 %.”
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
The HECS-HELP upfront payment discount was abolished from 1 January 2017.
Students paying tuition costs upfront no longer receive the 10 % reduction.
The voluntary repayment bonus of 5 % was also removed at the same time.
This bonus previously rewarded borrowers for making voluntary repayments of $500 or more.
The removal of these incentives affects all HELP debt holders, past and present.
Borrowers can no longer rely on these mechanisms to reduce their debt faster.
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Frequently Asked Questions
What changes were made to the HECS-HELP scheme?
From 1 January 2017, the 10 % upfront HECS-HELP discount and the 5 % bonus on voluntary HELP repayments were both removed across the HELP loan system.
Who was affected by the removal of the upfront discount?
The upfront discount change only affected students who could afford to pay their student contribution amounts in full at the time of study.
How did the voluntary repayment bonus work before it was removed?
Previously, borrowers with a HELP debt who made a voluntary repayment of $500 or more received a 5 % bonus credit applied to their outstanding balance.
Does the removal of the voluntary bonus affect historical repayments?
Yes — the removal affects all past and present students with HELP debts, meaning new bonus credits are no longer available for voluntary repayments after the removal date
When did the final opportunity to receive the voluntary repayment bonus close?
To take advantage of the 5 % voluntary repayment bonus before it was removed, payments had to reach the Australian Taxation Office by 31 December 2016.
Who was impacted by the removal of the voluntary repayment bonus?
The article explains it impacts all past and present students who want to reduce their HELP/HECS debt through voluntary repayments.
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