Legislation allowing for the collection of student HECS-HELP debts, as well as TSL debts, from Australian expats has passed through the Senate.
The change, supported by the opposition Labor party, will come into effect from July 2017 for the 2016/17 tax year.
Currently, Aussies with HECS (HELP) and TSL debts do not have to repay the loans while they are living and working overseas.
From 01 January 2016, though, Australians with HELP or TSL debts leaving the country for more than six months will be required to register the fact with the ATO. People already overseas at that time will have till 01 July 2017 to register.
People with a HECS-HELP or TSL debt must then submit an income self-assessment, including details of their foreign-sourced income, for the 2016-17 financial year onwards. Self-assessment of income will be due by 31 October each year as with tax returns of Australian residents.
The same minimum income threshold (currently $54,126) that applies to Australian residents will apply to expats.
The government expects the new rules to deliver a further $150 million dollars to its coffers over 10 years.
It is estimated that HECS and HELP repayments will become recoverable from 46,000 Australians living overseas, including around 15,000 working in the UK.
According to The Australian, while education minister, Christopher Pyne began negotiations for a reciprocal arrangement with the UK to help in collecting the repayments from British resident taxpayers.
“Our plan will enforce the same HECS repayment obligations on Australians living overseas that apply to those who remain on our shores,” Mr Pyne said on announcing the new measures in May this year.
“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.”