Changes to HECS debt repayments have come into effect today.
Starting now, the minimum annual income threshold to pay back student debts has increased from $54,435 to $67,000.
The Government has also changed how much people must contribute to their HECS debt each pay cycle.
Repayments
The increase to the minimum threshold means people with student debts will not have to start repaying them until they earn $67,000 a year.
Those earning up to $125,000 will pay 15 cents for every dollar over $67,000.
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For those earning between $125,001 and $179,285, the repayment will be $8,700 plus 17 cents for every dollar over $125,000.
If you earn $179,286 or more, after super contributions and any investment losses, you will continue to pay 10% of your income.
The new repayment system will be back-dated to 1 July 2025.
People who have overpaid this financial year will receive a refund in next year’s tax return.
The Government has also legislated a one-off 20% HECS debt discount, which is expected to come into effect later this year.
