Do Australian Expats Need to Repay Their HECS/HELP Debt?

If you're one of the many Australians living and working overseas, you might be wondering, do Australian Expats need to repay their student HECS/HELP debt while living abroad? The short answer is yes, but the specifics depend on your total worldwide income and your tax residency status in Australia. In this blog post, we help you to understand your HECS/HELP debt obligations to the Australian Tax Office (ATO) as an Australian Expat.

Understanding your HECS/HELP Debt Obligations

Since 1 July 2017, the Australian government requires Australian Expats with a student loan to report their worldwide income each year and make a mandatory repayment if they earn above the income thresholds. This applies to the following types of loans:

Higher Education Loan Program (HELP – previously known as HECS)
VET Student Loan (VSL)
Australian Apprenticeship Support Loan (AASL)

Australian Expats must report their income for the Australian financial year (1 July to 30 June) by 31 October, or later if lodging through a registered tax agent.

Reporting Your Worldwide Income

If you intend to move or already reside overseas for 183 days or more, you’ll first need to complete an overseas travel notification with the ATO. You can submit your overseas travel notification via your myGov Account or through a registered tax agent.

If you are still an Australian resident for tax purposes, any HECS/HELP repayment will be accounted for when lodging your Australian Tax return. However, for those Australian Expats who are Non-residents for tax purposes, depending on your worldwide income, you will need to lodge either a “Non-lodgement advice” form or “report your worldwide income” using one of the ATO’s assessment methods.

Income thresholds for Reporting

Non-Lodgement Advice: If your worldwide income for the 2024–25 year is at or below $13,608 (AUD), you need to lodge a non-lodgement advice form. This can be lodged via your MyGov account through the ATO online service and is a reasonably straightforward process.

Report your Worldwide income: If your worldwide income for the 2024–25 year is above $13,608 (AUD), you need to report your worldwide income. This can be lodged via your MyGov account or with a registered tax agent. When declaring your foreign-sourced income earned as a non-resident, you will have the option of choosing between one of three assessment methods.

Assessment methods

As an Australian Expat, you may choose one of the following 3 income assessment methods to calculate your non-resident foreign-sourced income:

1. Simple self-assessment method: The simple self-assessment method requires you to provide your gross amount of non-resident foreign income for the income year and advise your occupation. A standard deduction will be applied to reduce your foreign income based on your occupation.

2. Overseas assessed method: The overseas assessed method allows you to enter the foreign income amount you were assessed for in your foreign country of residence. The assessment must cover a 12-month period, even if you did not earn income for the whole 12 months.

3. Comprehensive tax-based assessment method: The comprehensive tax-based assessment method will require you to declare your gross foreign income and enter allowable deductions. This is similar to how you would complete an Australian tax return.

You can only choose one method to assess your foreign income for the income year. However, you may choose another assessment method in a later year.

Repayment thresholds

If your worldwide income (converted into Australian dollars) exceeds the minimum repayment thresholds, you will be required to make a repayment of your HECS/HELP liability. The minimum repayment threshold for the 2024-25 income year is $54,435. If your worldwide reported income exceeds this, you will have a repayment obligation at the relevant rate, as set out in the table below:

Repayment income (RI) thresholds	Repayment rate %
Below $54,435	Nil
$54,435-$62,850	1.0%
$62,851-$66,620	2.0%
$66,621-$70,618	2.5%
$70,619-$74,855	3.0%
$74,856-$79,346	3.5%
$79,347-$84,107	4.0%
$84,108-$89,154	4.5%
$89,155-$94,503	5.0%
$94,504-$100,174	5.5%
$100,175-$106,185	6.0%
$106,186-$112,556	6.5%
$112,557-$119,309	7.0%
$119,310-$126,467	7.5%
$126,468-$134,056	8.0%
$134,057-$142,100	8.5%
$142,101-$150,626	9.0%
$150,627-$159,663	9.5%
$159,664 and above	10%

For example, if your worldwide income was $100,000, you would be required to make a repayment of $5,500 (5.5%) on any outstanding HECS/HELP loan. Note that the rates are often updated each financial year due to government policy changes.

What Happens If You Don't Comply?

In recent years, the ATO has ramped up efforts to ensure compliance with HECS/HELP repayment obligations for Australian Expats. Failing to report your income or make repayments can lead to penalties, interest charges, and future issues if you return to Australia or deal with Australian government services.

Tips for Expats with HECS Debt

Budget for your Repayments: It’s important to budget for any expected repayment obligations when reporting your income each year. Ordinarily, the repayment amount would be deducted as part of the PAYG system in Australia, though this does not apply to Australian Expats.
Indexation: Your HECS/HELP debt will continue to be indexed on 1 June each year until it is paid. The indexation rate used is the lower of either the Consumer Price Index (CPI), or the Wage Price Index WPI) over the past 12 months. Therefore, if you are considering making a voluntary repayment, it is sensible to do this before the indexation is applied on 1 June.
Voluntary Repayments: You can make additional voluntary payments from overseas at any time to reduce your HECS/HELP loan balance. However, these will not reduce any compulsory repayment you may have when reporting your income for that year.

Final Thoughts

In summary, do Australian Expats need to repay their HECS/HELP debt? Yes, they do - if they meet the income thresholds. Keeping up with your obligations while living overseas can save you from bigger issues down the line. By keeping your details updated, reporting your income on time, and staying informed about repayment obligations, you can avoid unexpected penalties and make smart choices about your financial future.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the below link:

General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.