ATO HECS Refunds: Check if you are eligible to get an average of $400!

The Australian Taxation Office has started the refund process for the HECS loan borrowers who have fully paid their HECS debt in 2024 or 2023. The government has changed the way the HECS will be indexed recently offering some debt relief to the students.

The students can get a refund ahead of Christmas and enjoy their holidays, but some may see the refund later on. The students wondering about the ATO HECS refund can check the full details here after the 2023 and 2024 indexation reduction.

ATO HECS Refunds

The Aussies who have participated in the Higher Education Loan program- HECS to get interest-free loans for their higher studies can expect some refund if they have paid off their loan. In the HECS program, the Department of Education offers the students financial assistance for their tuition fees, room, board, etc. The amount will be directly paid to the educational institutions.

Under the program, the students can repay the loan when their income reaches a certain threshold, and the repayment of the loan is done through ATO. In the Higher Education Contribution Scheme, students receive the credits when they have HELP debt indexed on a specific date.

Under the HECS debt, the credit will take care of the amount you owe, but if you have already paid the debt, the credit will turn into your HECS refund, which ATO pays to you. Now that the Australian government has initiated debt relief and lowered the indexation, the students who have paid their HECS debt this year or the previous year can expect a refund.

How to check if you will receive the HECS Refunds? 

The authority indexed the HECS HELP loan annually in June to ensure it stays aligned with inflation, that is, the Consumer Price Index. However, now the government has changed the indexation measures and says the indexation will be done either in line with the Wage Price Index or CPI whichever is lower to reduce the financial pressure on the students.

Now, with the indexation, the ATO has sent a message to the borrowers urging them to check their HECS-HELP loan balance on the ATO account online as they have reduced it based on the 2023 and 2024 reduced indexations.

The debt of many students will be reduced based on the 20% debt relief as the indexation is applied. The students can check their ATO balance on the MyGov account in the following steps:

  • You should first go to the MyGov account at https://my.gov.au/en
  • If you don’t have one, you can easily create your MyGove account and go to the Services section.
  • Next, you should go to the ATO section and find the Loan Account section in it.
  • Under the description line, you can find the HELP and the balance that you have to repay.

People who don’t have any balance and paid off their loan can expect a refund from the ATO. Due to the debt relief, many debts have been cut out, so the Aussies should check their balance.

How much HECS refund can you expect?

According to the HECS program, the credits and refunds depend on the participant’s circumstances. The participants should understand that people who have paid off their debt before the 2023 indexation was applied would not receive the refund, it’s for people who have paid off their debt after the indexation was applied and paid the debt in 2023 or 2024.

The HECS refund amount will depend on many factors, such as the participant’s debt credit when the indexation was applied, and many others. However, the ATO has released the estimated average amount that the participants who have paid off their debt can receive is $400.

When can you expect the HECS Refund? 

As per the ATO notice, the taxation office has begun the refund process for the students who will be eligible to receive the refund based on their no-debt balance in their HELP loan account and have no other debt. Some students who have already paid their debt must have already received their refund.

The ATO is processing the refund automatically so whoever fits into the conditions will receive the refund, however, some participants can expect some delay or more time to receive the refund due to the complexity of their account and other factors.

According to the ATO, most of the Aussies who have cleared their HECS debt in 2023 or 2024 after the indexation is applied can expect their HECS refund in their account by the end of January 2025. The Aussies can expect the HECS refund in their bank account which they have mentioned in their tax return for receiving the tax refunds.

Aussies who have changed their bank account for any reason, so immediately report to the taxation office or go to MyGov to change or update their bank account information to receive a timely refund.

Will the current changes in HECS affect the credits?

The Australian government has announced that from 2025 the indexation will be based on whichever is lowest among the CPI and Wage per index to ensure students who just started to earn don’t feel financial pressure to repay the debt and their debt balance does not increase.

Now, as per the current June 2024 indexation, it was applied with the rate of 4.7%, which is now reduced to 4%, this will affect credits applied to your HECS debt repayment. Now as the indexation measure will be different, it will affect the indexation credits too.

The indexation will be added to your loan each year, the students can use the HELP indexation credit estimator to see their indexation credit for the year.  For instance, a person with HEL{ debt of $26,500 in 2023, has received a credit of around $1190.

The Aussies who have taken a HELP loan and repay the loan after the indexation either last year or this year can expect the refund soon by the end of Jan 2025.