Revised Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)
Schedule 4 - Removal of the voluntary repayment bonus
People may make a voluntary repayment towards their HELP debt to the Australian Taxation Office at any time. Voluntary repayments of $500 or more currently attract a 5 per cent bonus on the payment amount. This means a person's account is credited with an additional 5 per cent of their payment amount.
Schedule 4 implements a savings measure included in the 2013-14 Budget by amending the HESA to remove the voluntary repayment bonus.
The removal of the voluntary repayment bonus for HELP debtors would take effect from 1 January 2017.
Items 2, 3, 4 and 5 will update the example set out in subsection 140-5(1) of HESA to ensure it is relevant and current.
Item 7 will repeal section 151-5 of HESA. The effect of this provision is to remove the voluntary repayment bonus of 5 per cent for HELP debtors who make a voluntary payment towards their accumulated HELP debt.
Item 8 is an application provision which makes clear the circumstances in which the amendments made by Schedule 4 will apply. The amendments in respect of a voluntary repayment will only apply to a repayment made on or after 1 January 2017, regardless of whether the repayment relates to a debt incurred before or after this date.
As a result, if a person wants to make a voluntary repayment any time up to and including 31 December 2016, he or she would still be eligible for the voluntary repayment bonus (e.g. for a degree completed three years ago). However, a payment made on the following day (1 January 2017) would not attract the bonus.
Items 1 and 6 make technical amendments for the purpose of Item 7.
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