There has been lots of talk about the tax cuts that have started in July this year, however if you have noticed your take home pay has changed since the start of the 2019/2020 financial year it is not related to the legislated tax cuts. Instead any change has been a result of the changes to the Study and training loan repayment thresholds and rates. In simple terms, the calculations have changed as to how your HECS/HELP debt repayments are worked out.
While for many people the changes are for the better and they’ll find a few extra dollars in their pay packets, some people will be adversely affected. The primary changes are:
• The minimum annual income required before starting to make repayments has decreased from $51,957 to $45,881.
• The maximum repayment rate was capped at 8% of income, if assessable income exceeds $107,214. This has now be increased to 10% of income, if assessable income exceeds $134,573.
As general rule, if you earn less than $112,989 p.a. your repayment would have either decreased or remained the same. If you earn more than $112,989 p.a., your repayments are likely to have increased. If you would like to discuss the impacts that these changes will have on you, please contact us for a review.
2019/2020 (current) | 2018/2019 | |||||
Income Threshold | Income Threshold | |||||
Minimum | Maximum | Repayment rate | Minimum | Maximum | Repayment rate | |
$0 | $45,881 | 0.0% | $0 | $51,957 | 0.0% | |
$45,881 | $52,973 | 1.0% | $51,957 | $57,729 | 2.0% | |
$52,974 | $56,151 | 2.0% | $57,730 | $64,306 | 4.0% | |
$56,152 | $59,521 | 2.5% | $64,307 | $70,881 | 4.5% | |
$59,522 | $63,092 | 3.0% | $70,882 | $74,607 | 5.0% | |
$63,093 | $66,877 | 3.5% | $74,608 | $80,197 | 5.5% | |
$66,878 | $70,890 | 4.0% | $80,198 | $86,855 | 6.0% | |
$70,891 | $75,144 | 4.5% | $86,856 | $91,425 | 6.5% | |
$75,145 | $79,652 | 5.0% | $91,426 | $100,613 | 7.0% | |
$79,653 | $84,432 | 5.5% | $100,614 | $107,213 | 7.5% | |
$84,433 | $89,498 | 6.0% | $107,214 | – | 8.0% | |
$89,499 | $94,868 | 6.5% | ||||
$94,869 | $100,560 | 7.0% | ||||
$100,561 | $106,593 | 7.5% | ||||
$106,594 | $112,989 | 8.0% | ||||
$112,990 | $119,769 | 8.5% | ||||
$119,770 | $126,955 | 9.0% | ||||
$126,956 | $134,572 | 9.5% | ||||
$134,573 | – | 10.0% |