You can make voluntary repayments at any time to reduce the balance of your debt. Making a voluntary repayment reduces your balance immediately.
You may still have to make a compulsory repayment if, after making the voluntary repayment:
- you still have a debt
- your repayment income is above the minimum compulsory repayment threshold.
Voluntary repayments are in addition to compulsory repayments and are not refundable
Currently, and until 31 December 2016, if you make a voluntary HELP repayment of $500 or more, you get a 5% bonus. If your HELP debt balance is less than $500 and you make a voluntary repayment to payout the debt, you will get a 5% bonus. (see Bonuses, benefits and discounts)
From 1 January 2017 the voluntary repayment bonus will no longer apply.
You can use our HELP voluntary repayment calculator to estimate your bonus and the remaining balance on your loan.
- HELP voluntary repayment calculator
- studyassist: Changes to the HECS-HELP discount and voluntary repayment bonusExternal Link
Best time to make a voluntary repayment
If you plan to pay off your total loan balance with a voluntary repayment, it is best to make the repayment before you lodge your tax return.
If you lodge your tax return before your voluntary repayment is credited to your account, a compulsory repayment may be included on your notice of assessment and you may not receive the bonus on the voluntary repayment – this bonus applies to HELP loans only.
You may also benefit if you make a voluntary repayment before indexation is applied on 1 June. If you intend to make a voluntary repayment before indexation is applied, it is important to allow enough time for the payment to be received and processed by us before 1 June.
Do not make voluntary repayments to us before you have incurred a loan.
How to make a voluntary repayment
We offer a range of payment options both in Australia and overseas. Our preferred payment methods are BPAY® and credit card.
If you pay using BPAY, credit card or direct credit, you will need your payment reference number (PRN).
If you don’t know your PRN, you can find this out by logging on to myGov. You can view your account, voluntary repayment options and PRN at the same time.
Contact us if you are unable to access these details online.
Some people use salary packaging arrangements with their employers to pay off their loans by voluntary repayments. If you make such an arrangement, you must:
- make your voluntary repayments by BPAY, credit card or direct credit
- stop making repayments as soon as you have paid off your loan.
Voluntary repayments made through salary packaging are in addition to compulsory repayments. If your income is above the minimum repayment threshold for an income year, you will still need to make a compulsory repayment which will be included in your notice of assessment.
Entering into a salary sacrifice arrangement may result in your payer providing a fringe benefit to you. You should seek financial advice before entering into this arrangement.
Any voluntary repayments made by you, or by someone else other than your employer, are not tax deductable. If your employer makes voluntary repayments on your behalf, they may be able to claim a tax deduction. Your employer may also be liable for fringe benefits tax (FBT) on the repayments.
“This article has been provided by The Australian Taxation Office”Share