Change Advice for Software Developers
advice
business / SOFTWARE DEVELOPERS / advice / UNCLASSIFIED
Segment / audience / Format / Classification
CHANGE Advice
Reference No: / 2018-027
Title: / Remove HECS-HELP Benefit and New HELP Repayment Rates and Thresholds
Version No: / 1.0
Document Date: / 18/08/2017
CHANGE IMPLEMENTATION DATE / 1/07/2017
TAX MEASURE COMMENCEMENT DATE / 1/07/2018
CURRENT STAGE / CONCEPTUAL
HIGH LEVELDESIGN
REQUIREMENTS ANALYSIS
DETAILED DESIGN
LIKELIHOOD / DRAFT
LIKELY
DEFINITE
Channels affectedExternal Tax Software products affected
ELS Fringe Benefits Tax (FBT)
SBR Resource Rent Tax (RRT)
ECI Income tax
eSAT Business Accounting systems
Portal Superannuation Systems
Prefill data Payroll systems
Calculators Corporate enterprise systems ( e.g. finance/ HR)
Paper Forms
Outbound Correspondence
IMPORTANT. Information in this advice is draft only and subject to change. It is provided under the terms and conditions of the ATO Software Developers Homepage( ) and noted in the footer below
DEPENDANT LEGISLATION
Budget Savings (Omnibus) Act 2016
The Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017
BACKGROUND INFORMATION/POLICY INTENT
The Budget Savings (Omnibus) Act 2016 amended the Higher Education Support Act 2003 (HESA) and Income Tax Assessment Act 1997 affecting the management of Income Contingent Loans (ICL). This will remove the current HECS-HELP Benefit (HHB) and changes to the minimum repayment income rates and thresholds.
On 1 May 2017 the Government also announced a subsequent range of higher education reforms. This proposal reduces the HELP minimum repayment income to $41,999 and replaces the current repayment thresholds with new ones ranging from 1 % to 10%.
This measure was further detailed on 9 May 2017 as part of the Government’s Federal Budget announcement. The Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017 was introduced to Parliament on 11 May 2017. If this Bill is passed the new rates and threshold will commence from 1 July 2018 and will replace the changes reflected in The Budget Savings (Omnibus) Act 2016.
BUSINESS REQUIREMENTS SUMMARY
Part A- From 1 July 2018:
- Modify systems and products to incorporate new HELP repayment rates and thresholds which are linked to a number of ICLs - new minimum repayment rates and threshold commences at $51,957 (but less than $57,730) with a repayment rate starting at 2%.
- If subsequent legislation is passed a new set of minimum HELP repayment rates and thresholds with a minimum repayment threshold of $41,999 with a repayment rate starting at 1% going up to 10%.
- There will be flow-through effects for other ICL schemes, including the Trade Support Loans, Student Start-up Loan, ABSTUDY Student Start-up Loan for these changes.
Modify systems and products to account for HECS-HELP Benefit (HHB) no longer applying for periods after 1 July 2017. The HHB will cease on the 1 July 2017, however taxpayers are eligible to apply for HHB for the previous two years, i.e. 2015-16 and 2016-17 financial years. At the latest, HHB applications will need to be able to be accepted and processed until 30 June 2019 (i.e. a person can still be eligible to apply for a HHB in relation to income years before 2017-18 and all the laws that operated in relation to HECS-HELP benefit continue to apply to HECS-HELP benefit for those earlier income years).
CONCEPTUAL VIEW (High Level Design)
N/A
DETAILED DESIGN
N/A
Names of Forms impacted:
UNCLASSIFIED / This A controlled information resource WHICH is information that is not yet available to the general public, IT is made available to software developers for the sole purpose of assisting in the development of tax-related software (both commercial and in-house).
In some cases the information is in draft form or has been made available for the purposes of consultation, proof of concept work and or pilots.
HOLDERS OF THIS DOCUMENT should not on-forward controlled information to persons or organisations outside THEIR own organisation OR FOR OTHER PURPOSES. See / PAGE
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