Earn More Than $22 an Hour? Get Ready to Repay HECS

The Turnbull Government has clinched the support it needs to pass a new bill, and it’s not good news. Because they want to lower the HECS debt repayment threshold from $56,000 a year, down to $45,000. What this means is that if you’re earning more than $700 a week, or about $22 an hour, you’ll have to start repaying HECS from the new financial year—which begins Sunday.

So let’s assume you’ve got a hospo job that you hate. You’re on $22 an hour, which means that your repayments will be capped at one percent of whatever you owe. And let’s say you’ve got a HECS debt of $30K, that means you’ll have to pay $300 more tax after July than you would have had to otherwise.

Repayment amounts will increase as you earn more, peaking at 10 percent by the time you earn $132K.

The other change will impose a lifetime cap on HECS loans to the tune of $104,440. This, however, is replenishable. Meaning that if you hit the debt ceiling and pay off $10K, you’ll be eligible to again borrow $10K.

It’s expected that the bill containing these changes will officially pass the Senate by the end of the week, allowing the Government to fill a $250 million hole. Lucky them.