Expat Student Debt – HECS, HELP & TSL

Australians are fortunate to have a funding system in place that enables everyone, regardless of their wealth, to obtain a tertiary education.

The HECS, HELP & TSL schemes (otherwise known as Study Assist) enable students to pay off their student debt over a period of time through salary deductions by their Australian employers. Normally the only time you notice the deduction is by looking at your payslip.

However, when you move overseas and become an expat your obligations change when it comes to repaying your student debt.

In the past Australian expats were not required to continue making payments though it was always good practice to do so.

That all changed in 2017 when it become law that Australians living overseas must now report their worldwide income to the ATO (if they had outstanding student debt) and, providing that their declared income was above a certain threshold, must now start making repayments.

There are two methods that Australian expats can report their worldwide income:


The website.


Using an accountant.

When declaring your income to the ATO you will have three methods that you can use:


Simple Method

This method will allow you to provide the gross amount of your foreign income for the income year and state the occupation from which you derive most of your income from. A standardised deduction will be applied to reduce your foreign income based on your occupation. The standardised deduction is calculated on the average deductions claimed for that occupation from the previous income year.


Overseas Assessed Method

This method will allow you to enter the foreign income that you were assessed on from your most recent tax assessment from the foreign country that you are a resident of. The assessment must cover a 12-month period even if you did not earn income for the whole 12 months. There are limitations with using this method and these include:
  1. You did not receive from your foreign tax authority a tax assessment;
  2. The period of assessment does not overlap with the relevant Australian income year;
  3. You’ve received multiple assessments for the income made by different foreign countries; or
  4. You have previously used that income assessed to calculate your foreign income.


Comprehensive Tax-based Method

This method will require you to declare your gross foreign income and enter allowable deductions similar to how you would complete an Australian income tax return. If any expenses was for both work and private purposes, you can only claim a deduction for the work related portion.

Another point that is catching a lot of new expats out is that you have 7 days from when you move overseas to notify the ATO of your overseas contact details.

The simplest way to update your records is through the My Gov website but your accountant can also do this as well.

If you are about to move overseas, and already have a My Gov account setup, make sure you turn off the two step authentication (the security check where you receive a text message when logging in) because if you cancel your Australian phone number when you move overseas you will not be able to login because you won’t be able to receive the security code.

General Advice Disclaimer
