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Graduates who move overseas to be forced to pay back student debts Graduates who move overseas to be forced to pay back student debts
(about 4 hours later)
Australians who move overseas before paying off their student loans will be forced to continue paying off their debts while living abroad, under new laws that come into effect on Friday.Australians who move overseas before paying off their student loans will be forced to continue paying off their debts while living abroad, under new laws that come into effect on Friday.
Related: How do we get graduates who move abroad to pay back their student loan?Related: How do we get graduates who move abroad to pay back their student loan?
The new law means graduates will have to register with the Australian tax office (ATO) before moving overseas, if they plan to be away for six months or more.The new law means graduates will have to register with the Australian tax office (ATO) before moving overseas, if they plan to be away for six months or more.
Before the new law kicked in, residents living abroad were not required to lodge tax returns, so the ATO had no way of knowing if they were earning over the $54,126 minimum repayment threshold.Before the new law kicked in, residents living abroad were not required to lodge tax returns, so the ATO had no way of knowing if they were earning over the $54,126 minimum repayment threshold.
No penalties are currently in place for failing to register, but Australia has debt recovery agreements with other countries that allow for the sharing of tax information. Australians who fail to lodge their returns from 1 January could get audited.No penalties are currently in place for failing to register, but Australia has debt recovery agreements with other countries that allow for the sharing of tax information. Australians who fail to lodge their returns from 1 January could get audited.
“Data sharing between countries is critical to ensuring the future sustainability of the higher education loan program and trade support loan schemes,” Birmingham said. “Data sharing between countries is critical to ensuring the future sustainability of the higher education loan program and trade support loan schemes,” federal education minister Simon Birmingham said.
Graduates earning less than the $54,000 threshold, such as backpackers on working holiday visas, do not have to pay off their student loans, but will be required to register with the ATO. Graduates earning less than the $54,000 threshold, such as backpackers on working holiday visas, will not have to pay off their student loans, but will be required to register with the ATO.
“As well as making the scheme fairer and more equitable, the government’s changes will improve the sustainability of the scheme with taxpayers to benefit by $150m over the next decade,” the education minister, Simon Birmingham, said. “As well as making the scheme fairer and more equitable, the government’s changes will improve the sustainability of the scheme with taxpayers to benefit by $150m over the next decade,” Birmingham said.
It is estimated that the government loses between $20m and $3om annually due to missing student loan repayments from graduates who have moved overseas.It is estimated that the government loses between $20m and $3om annually due to missing student loan repayments from graduates who have moved overseas.
Birmingham said that the non-repayment of student debt had cost the economy $800m since the loan scheme was introduced in 1989. Birmingham said the non-repayment of student debt had cost the economy $800m since the loan scheme was introduced in 1989.
The law was flagged ahead of the May 2015 federal budget.The law was flagged ahead of the May 2015 federal budget.
Related: Women who have a child 'face paying 30% more interest on student loans'Related: Women who have a child 'face paying 30% more interest on student loans'
“There is no good reason why someone working as a banker in London or New York and earning over the threshold shouldn’t pay back what they owe Australia,” the then education minister Christopher Pyne said. “No government has ever tackled this obviously unfair situation – it’s been in the too-hard basket. Our plan will enforce the same Hecs [higher education contribution scheme] repayment obligations on Australians living overseas that apply to those who remain on our shores.”“There is no good reason why someone working as a banker in London or New York and earning over the threshold shouldn’t pay back what they owe Australia,” the then education minister Christopher Pyne said. “No government has ever tackled this obviously unfair situation – it’s been in the too-hard basket. Our plan will enforce the same Hecs [higher education contribution scheme] repayment obligations on Australians living overseas that apply to those who remain on our shores.”
The top three destinations for graduates – Britain the US and Singapore – account for almost 40% of all Australian residents working abroad, according to a 2012 report by the Grattan Institute.The top three destinations for graduates – Britain the US and Singapore – account for almost 40% of all Australian residents working abroad, according to a 2012 report by the Grattan Institute.