How Is Help Debt Repayment Calculated 2023?

Higher Education Loan Program (HELP) debt is financial assistance offered to undergraduate and postgraduate students, which can be used to cover the cost of their tuition fees. HELP debt is unique compared to other forms of debt, as it is subject to a repayment threshold and offers a range of concessions and exemptions. As of 2023, the repayment threshold for HELP debt is $45,881. This means that if your taxable income exceeds this amount, you are required to start making repayments.

How Is My Repayment Calculated?

HELP debt repayment is calculated based on your taxable income. The Australian Taxation Office (ATO) will assess your taxable income each financial year and calculate a repayment amount. This repayment amount is based on a tiered system, meaning that the more you earn, the higher percentage you will be required to pay back. The repayment rates for 2023 are as follows:

$0 - $45,881: 0% repayment rate
$45,881 - $51,818: 1% repayment rate
$51,819 - $57,753: 2% repayment rate
$57,754 - $64,612: 3% repayment rate
$64,613 - $71,477: 4% repayment rate
$71,478 - $78,340: 5% repayment rate
$78,341 - $85,204: 6% repayment rate
$85,205 - $92,067: 7% repayment rate
$92,068 - $98,931: 8% repayment rate
$98,932 & above: 9% repayment rate

Once your repayment rate has been calculated, the ATO will use this to calculate your HELP debt repayment amount for the financial year. This is done by multiplying your repayment rate by your HELP debt balance.

What If I Earn Less Than The Repayment Threshold?

If your taxable income is below the repayment threshold ($45,881) you will not be required to make any repayments. However, this does not mean that the debt is written off. It simply means that you are not required to make any repayments until your income rises above the threshold.

Are There Any Exemptions Or Concessions?

Yes, there are a number of exemptions and concessions that may apply to your HELP debt repayment. The most common exemptions are for people who are studying full-time or are facing financial hardship. If you are eligible for an exemption or concession, the amount you are required to repay may be reduced.

What If I Don't Make My Repayments?

If you fail to make your repayments, the ATO may take legal action to recover the debt. This could include issuing a garnishee notice to your employer, or a court order to recover the debt. It is important to remember that HELP debt is a legal obligation, and if you fail to make the required repayments you could face serious financial consequences.

Conclusion

HELP debt repayment is calculated based on your taxable income, with different repayment rates applicable depending on how much you earn. If you are earning below the repayment threshold ($45,881) you will not be required to make any repayments. However, if you are eligible for an exemption or concession, the amount you are required to repay may be reduced. It is important to remember that HELP debt is a legal obligation, and if you fail to make the required repayments you could face serious financial consequences.