Australians Working Overseas To Repay HECS Debt

[icyfroth]

Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.

Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debts.

New legislation will target those who have been living abroad for more than six months and who are earning more than $53,000 a year.

Mr Pyne said changes will make the system fairer and are expected to raise more than $140 million for the Government over 10 years.

"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 scot-free," he said in a statement.

"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."

He said the changes will include repayment obligations from July 1, 2017 based on 2016-17 income.

"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," Mr Pyne said.

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.

http://www.abc.net.au/news/2015-05-02/australians-working-abroad-to-repay-student-loans/6439888

Not til 2017. I wonder how they'll go after them.

[icyfroth]

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@vicr3000 wrote:

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@rabbitearbandicoot wrote:

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@i-need-a-martini wrote:

Seriously? We are going to waste money chasing a (relative) handful of people overseas.

Meanwhile, the stats show that the a significant number of uni graduates (the vast majority who stay in the country) never reach the magic $53,000 salary heights required to start paying off their debt.

If the govt wants to recover their money it would be more logical to lower the threshold.

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what the !@#$ are they doing with their superior education? Can't earn $53,000 a year? What a Joke! 

I agree with the lower threshold - it should be anything above the basic wage.

I had to pay all my debts no matter how much / little I was earning.

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rabbit

but some aren't like you, they just use the rules to their own advantage.

I don't think the budget went far enough on collecting HECS debts.

As said above, lower the threshhold, especially over time and after 10 years, anything above the basic wage has to be paid back

and if married, that taken into account as well so both incomes used when asssessing the threshold level.

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Welcome back. Vic.!

[vicr3000]

Thanks

I wish Abbott had gone further and roped in those lazy bludgers who won't pay back money owed by "using"

the rules to their advantage and not just on HECS.

If they had all this debt back, some of it might actually get used to create jobs in less well off areas like

struggle street etc.

[icyfroth]

Alan Jones spoke with Joe Hockey about that in this morning's show.

Can't remember exactly what was said but the general gist was that back in the day,  the most promising students attained scholarships  while others mowed lawns and pumped petrol to put themselves through uni, or were funded by their parents.

Has the threshhold been reduced? I didn't catch anything about that.

[vicr3000]

No, just people who go OS to work have to pay it back.
They should have extended it to those who go overseas
on holiday as well.

Yes, most students I know had to work.

Others of course rack up a huge debt to the Gov't, then never get a job and then get married and so it never gets paid back.

[debra9275]

http://www.abc.net.au/news/2015-05-02/australians-working-abroad-to-repay-student-loans/6439888

Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.

Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debt

but not until 2017 which is after the next election.  why didn't they start clawing it back now?

[tezza2844]

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@debra9275 wrote:

http://www.abc.net.au/news/2015-05-02/australians-working-abroad-to-repay-student-loans/6439888

Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.

Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debt

but not until 2017 which is after the next election.  why didn't they start clawing it back now?

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"Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.

Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debt"

Does that mean graduating students (after 2017 and the next election) under this "Government" will be driven out of Australia in the tens of thousands because cannot find work here?

[cherry*135]

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@debra9275 wrote:

http://www.abc.net.au/news/2015-05-02/australians-working-abroad-to-repay-student-loans/6439888

Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.

Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debt

but not until 2017 which is after the next election.  why didn't they start clawing it back now?

____________________________________________________________________________________________________

First of all does the Aust Govt has to have 'tax agreements' with any countries they want to collect HECS & HELP debts for them.

The only country I am aware of that they have had talks with is the UK, so far. 

Second, the graduate living overseas has to be earning above the threshold (The compulsory repayment threshold for the 2014‑15 income year is $53,345. For 2015-16, the compulsory replayment threshold will be $54,126.).

For thos who earn below that, or don't work at all, then there is no recovery.

Of course there are Australian graduates living overseas that do voluntarily pay off their HECS & HELP debt too.

Mr Pyne said changes will make the system fairer and are expected to raise more than $140 million for the Government over 10 years.

Hope they didn't use that estimated figure to bolster the Budget.

[cherry*135]

5 May 2015

Collecting student loans from overseas debtors just a start

.....The challenge will be to collect repayments in a cost-effective way. Retaining the income-contingent aspect for overseas debtors would place an administrative burden on the ATO as well as on debtors. England has a similar income-contingent loan program to Australia. But, unlike Australia, it requires its overseas debtors to repay.

Like debtors living in England they repay under the income-contingent system. Each year, overseas debtors are required to submit significant paperwork to prove their income levels. A default repayment applies to debtors who do not submit evidence. Despite these efforts, more than two-thirds of English debtors do not repay.

Pyne wants to introduce a similar system. He is investigating a bilateral agreement with the UK in order to recover debts from Australians living there.

But, as the chart below shows, overseas debtors living in the UK and New Zealand (with which Australia already has an in-principle agreement for debt recovery) represent fewer than 30% of all overseas debtors.

Extending these agreements to other countries is likely to be difficult. We need a low-cost repayment system that can collect from debtors in many countries.

....A more cost-effective way is to require overseas debtors to repay a flat amount each year. New Zealand provides a possible guide. It minimises administrative costs by charging overseas debtors flat amounts based on outstanding debt levels each year. The repayment amount ranges from A$1000 to A$4800 a year depending on the amount owed.

http://theconversation.com/collecting-student-loans-from-overseas-debtors-just-a-start-41157

[***super_nova***]

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@vicr3000 wrote:

No, just people who go OS to work have to pay it back.
They should have extended it to those who go overseas
on holiday as well.

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What has going o/s for holidays has to do with repaying HECS?  If people live here, and are employed, they are paying back the HECS.  The ATO makes sure of that; when you do your return they get the HECS owing.

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@vicr3000 wrote:

Others of course rack up a huge debt to the Gov't, then never get a job and then get married and so it never gets paid back.

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What does getting married has to do with repaying or not repaying the HECS?  Most professional women do not have children the moment they get married, actually that is the problem (for fertility), most wait until they are well into their 30s, and by then they do not have HECS debt.  And when they do have children, many go back to work within months.  At least that is what I see  looking at my daughter's friends, and daughters of my friends.  I can guarantee you they have all high income, and paid off their HECS within few years of finishing their degrees.

The only people who get around re-paying HECS are those who went to work o/s before their debt was repaid.

By the way, if the outstanding debt for people working o/s is only $140mil, it really is a drop in a bucket, and I wonder how much it will cost to recover it.

[lurker172602]

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vicr3000

then never get a job and then get married and so it never gets paid back.

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I did not know that.  Marriage negates your HECS debt.  Well, well, that's amazing.