• HELP and TSL overseas obligations

    The Australian Government has introduced changes relating to Higher Education Loan Program (HELP) and Trade Support Loan (TSL) obligations.

    Under these changes, your first repayment against your HELP – formerly known as Higher Education Contribution Scheme (HECS), and your TSL will commence from 1 July 2017. It will be based on your worldwide income for the 2016–17 Australian income year (that is, from 1 July 2016 to 30 June 2017). In addition, you will be required to submit an overseas travel notification if you meet certain criteria.

    Similarly to if you were living and working in Australia, if you live and work overseas and earn worldwide income that exceeds the minimum HELP and TSL repayment thresholds, you will be required to make repayments against your loan.

    Find out about:

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    New HELP and TSL requirements from 1 July 2017

    The two main changes the Australian Government has introduced means you must:

    • update your contact details and submit an overseas travel notification if you have an intention to, or already reside overseas, for 183 days or more in any 12 months
    • lodge your worldwide income or a non-lodgment advice.

    These changes apply to new and existing HELP and TSL debts.

    You can lodge online through ATO online services or through an Australian registered tax agent.

    If you're lodging your own tax return, the deadline to report your worldwide income for the 2016–17 Australian income year is 31 October 2017. It's important you lodge on time, even if you can't pay straight away, as you'll avoid a penalty for lodging late.

    You can use a registered Australian tax agent to lodge on your behalf. Registered Australian tax agents have a special lodgment program and can lodge returns for their clients after the usual 31 October deadline. The due date will depend on your personal circumstance. Contact your tax agent for advice.

    After you have reported your worldwide income, you will receive a notice confirming:

    • how much you owe or will be refunded
    • the due date for payment.

    Your HELP and TSL debt will continue to be indexed each year until it is paid. You can make additional voluntary repayments from overseas at any time to reduce the balance of your debt. These repayments will not reduce any compulsory repayment obligations you may have.

    Accessing your myGov account from overseas

    Before you move overseas

    If you already have a myGov account and intend to move overseas, we recommend you log in to your account and turn off the myGov security code featureExternal Link before you lose access to your Australian mobile number. If you have access to your number overseas, you can keep this feature turned on.

    If you are already overseas

    If you already have a myGov account and you do not have access to your Australian mobile number, you will not be able to log in to your myGov account if the security code feature is turned on.

    If you have lost access to your myGov account overseas or do not have a myGov account, you can create a new account and link to the ATO. When creating the account, make sure you skip the step to set up the security code feature as myGov does not accept international mobile numbers.

    Log in or create a myGov account

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    HELP and TSL overseas travel notification

    You will need to notify us, within seven days of leaving Australia, if you intend to move or already reside overseas, for 183 days or more in any 12-month period. This involves completing an overseas travel notification and updating your contact details, including your mobile, international residential, postal and email addresses. You only need to update your details on ATO online services, not on your myGov account.

    To complete your overseas travel notification you need:

    • your Australian or foreign passport
    • your travel information including  
      • the country you are planning to reside in while overseas
      • your expected or actual departure date from Australia
      • your expected or actual date of return to Australia.
       

    You must continue to update your contact details as long as you reside overseas through our online services via myGov.

    You will only need to lodge a subsequent overseas travel notification if you come back to Australia, your residency changes and you meet the requirements to notify again. You do not need to complete a subsequent notification if you are returning to Australia for a short period (for example, a holiday).

    ATO online services is accessed through myGov. By clicking on the below link you will be taken away from ato.gov.au. Once logged in to ATO online services, follow these menu options to complete your overseas travel notification: Tax > Loan accounts > Overseas travel notification.

    Overseas travel notification

    Reportable income for HELP and TSL

    Your worldwide income is your Australian repayment income and your non-resident foreign sourced income. Your non-resident foreign sourced income is any income you earned from sources outside of Australia while you were a non-resident.

    To determine the next steps in reporting your worldwide income, you will first need to work out if you are an Australian or non-resident for tax purposes.

    Next step:

    If you have a HELP or TSL debt and are a non-resident for tax purposes (full or part year)

    Your worldwide income

    What you need to do

    If your worldwide income for the 2016–17 year is at or below $13,717 (AUD).

     

    This is 25% of the minimum repayment threshold.

    You need to lodge a non-lodgment advice form.

     

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    To complete the non-lodgment advice form, lodge through ATO online services or through a registered Australian tax agent.

    If your worldwide income for the 2016–17 year is above $13,717 (AUD).

    You need to report your worldwide income.

     

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    To report your worldwide income, you can lodge through ATO online services or through a registered Australian tax agent.

    Note: When declaring your foreign income earned as a non-resident you will have the option of choosing between one of three assessment methods.

    If you have a HELP or TSL debt and are an Australian resident for tax purposes for the full year

    Your worldwide income

    What you need to do

    If you earn worldwide income, including Australian repayment income and foreign sourced income in the 2016–17 year.

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    If you do not need to lodge a tax return, you may need to lodge a non-lodgment advice form.

     

    To complete the non-lodgment advice form, lodge through ATO online services or through a registered Australian tax agent.

    Note: If you have a HELP or TSL debt you will have an ongoing obligation to report your worldwide income, or lodge a non-lodgment advice.

    See also:

    Worldwide income for HELP and TSL if you're a non-resident for tax purposes

    You can report your worldwide income through myTax within ATO online services or through an Australian registered tax agent.

    If your worldwide income (converted into Australian dollars) exceeds the minimum HELP and TSL repayment thresholds, you will be required to make a repayment of your HELP and TSL liability. Repayments may be in the form of a compulsory repayment or an overseas levy depending on how your worldwide income is made up.

    Note: myTax is accessed through ATO online services via myGov. Once you've logged in to ATO online services, follow these menu items options: Tax > Loan accounts > Report income.

    When reporting your income you will be asked to confirm if your contact and financial details are up-to-date. MyTax only accepts Australian financial institute details. If you don't have an Australian account you may bypass this step within myTax. The ability to bypass will be triggered by having a HELP or TSL debt, and an international residential address recorded.

    The following calculation demonstrates how a compulsory repayment and overseas levy may be raised on your reported worldwide income.

    Example: How repayments are calculated

    In the 2016–17 income year, Emily earned Australian-sourced repayment income of $56,000 and non-resident foreign-sourced income of $31,000. This gave her a total worldwide income of $87,000.

    The total repayment obligation on Emily’s worldwide income is $6,090: that is $87,000 × the applicable repayment rate (7.0%).

    As Emily earned over the minimum repayment rate in Australia, the compulsory repayment component of Emily’s repayment is determined as follows:

    • $56,000 × the applicable repayment rate (4.0%) = $2,240.

    The overseas levy raised on Emily’s worldwide income is calculated as follows:

    • Total repayment obligation − any compulsory repayment = Emily’s overseas levy.

    Emily’s overseas levy is therefore determined as follows: $6,090 (total repayment obligation) − $2,240 (compulsory repayment on the Australian-sourced repayment income component) = $3,850 (overseas levy).

    End of example

    See also:

    Information you need to report your worldwide income

    To assist in determining your worldwide income, you may need to refer to notices or statements you have received in your country of residence, or country you earned worldwide income. These may include, but are not limited to:

    • tax assessment or summary from a foreign tax authority (for example, issued from HMRC, IRS, National Tax Agency)
    • payment summaries or payment slips from employers
    • bank statements
    • notices showing amount of government benefits received
    • dividend and interest certificates
    • rental income statements
    • receipts to claim deductions for expenses incurred in earning non-resident foreign sourced income, for example, work-related expenses you incurred while performing your job as an employee.

    Converting your currency before lodging worldwide income

    All foreign income, deductions and foreign tax paid must be converted to Australian dollars before being included in your return. The rate of conversion will be the average exchange rate for the Australian income year.

    The ATO foreign income conversion calculator will help you convert your foreign currency. If you require a foreign exchange rate for a currency that is not listed within the conversion calculator, you may use any reasonable externally sourced exchange rate for that currency, for example from a bank. The rate of conversion must be the average exchange rate for the Australian income year.

    Next step:

    HELP and TSL assessment methods for non-resident foreign sourced income

    When declaring your worldwide income to us, you have the option of choosing between three income assessment methods that will be used to calculate your non-resident foreign sourced income.

    You can only choose one method to assess your foreign income for the income year. The method you choose this income year does not restrict your choice of assessment method in a subsequent year.

    Simple self-assessed method

    This method requires you to provide your gross amount of non-resident foreign income for the income year and state the occupation from which you derived most of your foreign- sourced income. A standard deduction will automatically be applied to reduce your foreign income based on your occupation.

    Depending on your personal circumstances, you may wish to use a different assessment method to determine the non-resident foreign-sourced income component of your worldwide income. For example, if you have deductions that would be allowable under Australian tax laws.

    Example: Simple self-assessed method

    Anita has been living in New Zealand for two years, working as an occupational therapist. To calculate her non-resident foreign-sourced income, Anita chooses the simple self-assessed method.

    Anita declares her total gross foreign income for the income year and reports her occupation. As part of the self-assessment method, a standard deduction is then automatically subtracted from her gross foreign income. This works out her net non-resident foreign-sourced income, which is used to calculate her overseas levy.

    End of example

    Overseas assessed method

    This method allows you to enter the foreign income amount you were assessed for on your most recent income assessment from your foreign country of residence. The assessment must cover a 12-month period, even if you did not earn income for the whole 12 months.

    There are limitations to using this method. You cannot use this method if:

    • you did not receive a tax assessment from a foreign tax authority
    • you received a tax assessment that does not cover a 12-month period
    • the period of the assessment does not overlap the relevant Australian income year (1 July–30 June)
    • you received multiple assessments for the income year from tax authorities of different foreign countries
    • you have previously used that income assessment to calculate your foreign income.

    Example: Overseas assessed method

    Lee is living overseas and working as a lawyer. In working out his non-resident foreign-sourced income for the 2016–17 income year, Lee chooses the overseas assessed method.

    Lee has an overseas tax assessment for the period 6 April 2016 to 5 April 2017 (this overlaps the relevant Australian income year). Lee has not received any other income assessments from other countries. He has not previously used his income assessment to calculate his foreign-sourced income.

    When using the overseas assessed method, Lee reports the foreign income amount he was assessed for as shown on his foreign income assessment. He must then convert this to Australian dollars to calculate his non-resident foreign-sourced income.

    End of example

    Comprehensive tax-based assessment 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.

    You must provide the gross amount (pre-tax amount) of your foreign income. You must do this even if tax was taken out in the country where you earned the income.

    Next step:

    Example: Comprehensive tax-based assessment method

    Nadia is a small business owner in Canada. When working out her foreign-sourced income for the 2016–17 income year, Nadia chooses the comprehensive tax-based assessment method.

    Nadia determines her gross foreign income from her salary and business income. She then works out her allowable deductions related to her employment. Nadia subtracts her allowable deductions from her gross foreign income to work out her non-resident foreign-sourced income.

    End of example

    See also:

    HELP and TSL non-lodgment advice

    If you did not earn more than $13,717 AUD for the 2016–17 income year you will need to submit a non-lodgment advice.

    A non-lodgment advice is a document lodged in lieu of a tax return. This document tells us that you will not be lodging a return as you:

    • are under the 25% minimum HELP and TSL repayment threshold
    • have made a determination that you have no requirement to report your worldwide income which includes lodging an individual tax return.

    Note: If you had previously submitted a non-lodgment advice and your situation has changed; you are still able to report your worldwide income. This can be done using our online services through myGov or through an Australian registered tax agent.

    Example: Non-lodgment advice

    Harriet, who has a HELP debt from her undergraduate studies, moved to the United Kingdom to undertake her postgraduate degree. Harriet has been studying full-time and working casually as a tutor.

    For the 2016–17 income year, Harriet earned the equivalent of $10,500 AUD, which is below the 25% minimum HELP repayment threshold. Harriet has made the determination that she does not need to lodge an Australian individual income tax return. She will lodge a non-lodgment advice using our online services through myGov or through an Australian registered tax agent.

    End of example

    See also:

    Contacting us from overseas

    You can contact us for more information about the changes introduced to overseas HELP or TSL debt. We will need to establish your proof of identity before we can discuss details of your account. Ensure you have the right proof of identity documents with you before you contact us, including your Australian passport or Australian birth certificate.

    See also:

    Last modified: 18 Aug 2017QC 47358