Tens of thousands of Australians living overseas will no longer be able to avoid paying off their student loans, under new measures to be announced in the Federal budget.
Education Minister Christopher Pyne said from 2017, Australians living overseas will be legally obliged to repay their HECS and HELP debts.
New legislation will target those who have been living abroad for more than six months and who are earning more than $53,000 a year.
Mr Pyne said changes will make the system fairer and are expected to raise more than $140 million for the Government over 10 years.
“Currently, because graduates living overseas don’t have to do an Australian tax return, there is no way to know if they are earning above the threshold that triggers HECS repayments and many get off scot-free,” he said in a statement.
“Others come back to a debt that has been accruing interest at CPI rates while they are away.
“No government has ever tackled this obviously unfair situation – it’s been in the too-hard basket. Our plan will enforce the same HECS repayment obligations on Australians living overseas that apply to those who remain on our shores.”
He said the changes will include repayment obligations from July 1, 2017 based on 2016-17 income.
“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,” Mr Pyne said.
Under the current system, overseas debtors are able to make voluntary HECS repayments to the Australian Tax Office but are not under any legal obligation to do so.