New plan to recover HECS debt from Aussies living abroad

Media Release
  • Minister for Education and Training
  • Leader of the House

For the first time ever, Australians who have moved overseas for more than six months will be required to pay back the same amount of their HECS debt as they would if they were residing in Australia from July 2017.

The Minister for Education and Training said today the Australian Government will legislate to require all Australian graduates living offshore to start making HECS payments based on their income in the 2016-17 tax year if they earn above the threshold of $AUD 53,000.

“Currently, because graduates living overseas don’t have to do an Australian tax return, there is no way to know if they are earning above the threshold that triggers HECS repayments and many get off scott-free,” Mr Pyne said.

“Others come back to a debt that has been accruing interest at CPI rates while they are away.

“No government has ever tackled this obviously unfair situation – it’s been in the too-hard basket. Our plan will enforce the same HECS repayment obligations on Australians living overseas that apply to those who remain on our shores.

“There is no good reason why someone working as a banker in London or New York and earning over the threshold shouldn’t pay back what they owe Australia.”

This change is fair for the individual and the taxpayer and expected to improve Australia’s balance sheet by more than $140 million over the next ten years. It will include repayment obligations from 1 July 2017 based on 2016-17 income.

Under the current system, overseas debtors are able to make voluntary HECS repayments to the Australian Tax Office but are not under any legal obligation to do so.

For more information

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