What has changed and what you need to know.
In early November the Federal Government passed a bill to make an amendment to legislation regarding the repayment of Fee HELP/HECS Loans for those people who have moved overseas.
Previously, the legislation was that If you went overseas and said that you were no longer an Australian tax resident, i.e. you had no intention of ever returning to Australia (different to being an Australian citizen); your HELP/HECS Debt would just sit there regardless of what you earn overseas. If you never returned to Australia, you would never repay your debt.
Under the new amendment, regardless of whether you are an Australian Tax Resident or not; if you have a HELP/HECS debt and total worldwide earnings are over the relevant Australian Taxable income threshold; you are now required to make a repayment under Australian law.
The following bills passed the Senate without amendments:
The Bills propose amendments to implement a 2015-16 Budget proposal to ensure that the same debt repayment obligations that apply to debtors who live in Australia apply to those who live overseas.
The Overseas Debt Recovery Bill will create an obligation to make repayments on their HELP and TSL debts based on their total Australian and foreign-sourced income, known as their worldwide income. This will be imposed as a levy (to be known as the “overseas debtors repayment levy”) through the other Bill.
If you would like to know more about how this may impact you either currently or in the future, feel free to contact one of our Geelong based Tax specialists!