A HECS HELP loan is a loan from the Australian Government for all or part of a students university contribution amount.
Repayment of this can be deferred until the student joins the workforce and earn in excess of the threshold figure for each relevant year.
These figures are indexed annually.
Any voluntary repayments above the amount required in any tax year attract a 10% discount.
The minimum repayment is based on your income and the following percentages:
The 2009/10 HECS HELP Income Repayment threshold is $43,150.
2008/09 Calculations
Repayment rate and Income
Nil – Below $41,595
4.0% $41,595 – $46,333
4.5% $46,334 – $51,070
5.0% $51,071 – $53,754
5.5% $53,755 – $57,782
6.0% $57,783 – $62,579
6.5% $62,580 – $65,873
7.0% $65,874 – $72,492
7.5% $72,493 – $77,247
8.0% $77,248 and above
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The % is calculated on the entire figure, not in salary brackets like tax.
ie:
$77,247 salary would be 77,247 x 7.5% = $5,793
$77,248 salary would be 77,248 x 8.0% = $6,180
From the ATO calculator:
An income under $41,595 in 2008/09 you pay nothing
Your taxable income $ 60,000 Your HELP compulsory repayment for 2008-09 is: $3,600.00
Your taxable income $ 70,000 Your HELP compulsory repayment for 2008-09 is: $4,900.00
Your taxable income $ 80,000 Your HELP compulsory repayment for 2008-09 is: $6,400.00
Your taxable income $120,000 Your HELP compulsory repayment for 2008-09 is: $9,600.00
Anything paid above that figure will be given the 10% discount.
eg:
Earn $70,000 you must pay $4,900.
If you choose to pay $5,900, then you get the 10% discount on the extra $1,000 you have paid.
All HELP debts are indexed annually on 1 June to reflect changed in the Consumer Price Index (CPI)
ie: A $12,000 debt would become $12,360 if CPI was 3% for the year. This is effectively interest at a rate fixed to CPI.