Confused about the new ATO changes for Expats with Student Loans?

From 1 July 2017, based on your worldwide income for the 2016–17 income year some Australian Expats must begin repaying their student loans.

There is naturally confusion about who has to repay and how much so here are answers to the Top Five Questions being asked by our Members.

The Australian Government has introduced changes to Higher Education Loan Program (HELP) and Trade Support Loan (TSL) repayment obligations. Under these changes, your first repayment against your HELP and TSL loan will commence from July 1st, 2017 based on your worldwide income.

Australia and the US have different tax years so the confusion is compounded by the fact that you have to manually calculate your worldwide income from July 1st of 2016 up to June 30 of 2017.

Q: Who is effected?

A: If you owe money for your HELP or TSL, and you meet the Substancial Presence Test, making you a US Tax Resident.

Q: What is the Income Threshold before I have to begin making repayments?
A: If your worldwide income from July 1st 2016 to June 30, 2017 is:

at or below $13,717 AUD for the 2016/17 income year, you will need to submit a non-lodgment advice through myGov.
above $13,717 AUD and below $54,869 AUD for the 2016–17 income year, you will need to declare your worldwide income through myGov. An overseas levy would not be raised.
above the $54,869 AUD for the 2016–17 income year, you will need to submit your worldwide income through myGov. An overseas levy will be raised as your worldwide income exceeds the minimum repayment threshold and you will need to repay this amount.

Here is the link to the ATO Indexation Rate Table.

Q: How do I convert my US earning into AUD to see if I exceed the worldwide income threshold?
A: Here is the link to the ATO’s FOREX Conversion Table.

Q: What if I choose not to file or repay my loan?
A: The ATO can defer repayments for those with financial challenges, however the ATO has many options at its disposal to collect debts including charging interest, fines, collection and bankruptcy proceding for those who ignore their student debt.

Q: How do I make a repayment?
A: You can use BPay from your Australian Bank Account. If you are transferring money to your account from the US, be sure to research the exchange rate your bank or financial institution is offering to be sure you get the most AUD for your USD.

You can click the link below to see the Member Preferred Rate that was negotiated with OFX for members of The Australian Community to compare against your current provider. Spoiler Alert: It is a better rate than TransferWise!

Your situation may be more complex, so if you have any additional questions you can visit the ATO’s Overseas Obligations FAQ’s page, call the ATO or contact your Australian Accountant or Tax Advisor.

Before you send money Overseas!

Use this Currency Converter to gauge how much money you could save over your existing FOREX service by accessing The Australian Community’s Preferred OFX Rate.

Currencies can fluctuate by the minute. This Converter is indicative of the Preferred OFX Rate at this time.

However, once you register and access our Preferred OFX Rate, you will see the current converted rate, and the converted amount before making your transfer.

About The Australian Community

Founded in 2011, we connect more Australians in America.

If you are a professional Australian taking your career to the next level, or the U.S. is the next step in your company’s global expansion, we can connect you to all of the resources you need for success in America.

Did you find this article helpful? Make a Donation!

The Australian Community is a 501(c)(3) organization, and all donations are fully tax-deductible under the IRS Code.

General Donation

The Australian Community is a 501(c)(3) U.S. Public Charity. Its Mission is to connect Australian living in the United States through social, professional and charitable initiatives.

It is qualified to receive tax deductible donations, bequests, devises, transfers or gifts under Sections 170, 2055, 2106 or 2522 of the Code.