Changes to Student HELP Debt Obligations for Australian Expats from 1 July 2026

If you are an Australian Expat with a HELP debt, some important changes are coming into effect from 1 July 2026 that could directly impact how much you are required to repay. Understanding your HELP Debt Obligations has never been more important, particularly as the rules around overseas repayments have been strengthened over recent years.

This blog outlines what is changing from 1 July 2026, the recent 20% reduction to HELP debts, the latest indexation applied, and what Australian Expats living and working abroad need to know to stay on top of their obligations.

What is a HELP Debt?

The Higher Education Loan Program (HELP), previously known as HECS, is the Australian Government's income-contingent loan scheme that helps eligible students pay for their university education. Rather than paying upfront, the debt is repaid through the tax system once your income exceeds the minimum repayment threshold.

For Australians living overseas, the obligation to repay does not disappear simply because you have left Australia. HELP debt repayment obligations follow you regardless of where in the world you live and work.

The 20% HELP Debt Reduction on 1 June 2025

In a significant move for HELP debtors, the Australian Government applied a one-off 20% reduction to all outstanding HELP debts on 1 June 2025. This reduction was applied before the annual indexation calculation for that year, meaning that eligible Australians, including expats, saw their HELP debt balances meaningfully reduced.

For Australian Expats who may have accumulated a sizeable HELP debt before moving overseas, this was a welcome development. If you have not checked your HELP debt balance recently, it is worth logging in to ATO Online Services via myGov to confirm your updated balance following this reduction.

HELP Debt Indexation on 1 June 2026: 2.8%

Each year on 1 June, HELP debts are indexed in line with the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). For the 2026 year, indexation of 2.8% was applied to all outstanding HELP debt balances. This means that if you have not made voluntary repayments to reduce your balance, your HELP debt will have increased by 2.8% on 1 June 2026.

While 2.8% is considerably lower than the indexation figures seen in recent years, it is a reminder that HELP debts do grow over time if not actively managed. For Australian Expats earning overseas, it can be easy to overlook HELP debt management, particularly when it feels like an obligation that is out of sight and out of mind. However, with compulsory repayment obligations applying to your worldwide income, staying on top of your HELP debt is important.

Tip: If you wish to reduce the impact of indexation in future years, voluntary repayments made before 1 June each year will reduce the balance on which indexation is calculated. Voluntary repayments can be made at any time through ATO Online Services and are in addition to, not instead of,  any compulsory repayment you may owe.

HELP Debt Obligations for Australian Expats

A common misconception among Australian Expats is that HELP debt repayments only apply to people living in Australia. This is not correct. Since 2017, Australian Expats have been required to report their worldwide income to the ATO and make compulsory repayments on their HELP debt if their worldwide income exceeds the minimum repayment threshold, regardless of whether they are an Australian tax resident or a non-resident for tax purposes.

Failure to comply with these obligations can result in penalties. It is also important to note that your HELP debt will continue to be indexed each year until it is fully repaid, meaning it will grow over time if no repayments are made.

When declaring your foreign-sourced income as a non-resident, the ATO provides three income assessment methods to calculate your worldwide income:

• the Simple Self-Assessment Method;

• the Overseas Assessed Method; and

• the Comprehensive Tax-Based Assessment Method.

Choosing the most appropriate method for your circumstances can make a meaningful difference to the repayment amount calculated, and this is an area where specialist advice can be valuable.

The Key Change from 1 July 2026: New Compulsory Repayment Formula

From 1 July 2026, the way in which compulsory HELP debt repayments are calculated is changing.

New Minimum Repayment Threshold

The minimum repayment threshold, which is the level of worldwide income above which a compulsory repayment is triggered, will increase from $67,000 in 2025–26 to $69,528 in 2026–27.

If your worldwide income (converted to Australian dollars) is below $69,528, no compulsory repayment will be required for the 2026–27 year.

New Compulsory Repayment Formula (from

For incomes above the $69,528 threshold in 2026–27, the compulsory repayment will be the lower of:

• Formula 1: $0.15 for every dollar earned over $69,528, plus an additional $0.17 for every dollar earned over $129,717; or

• Formula 2: 10% of your total worldwide income.

The ATO will apply whichever of the two calculations results in the lower repayment amount. This is a notable change from prior years, which used a simpler percentage-of-income approach applied across fixed income bands.

A Practical Example

To illustrate how this works in practice, consider two Australian Expats, one earning a worldwide income of $90,000 AUD and another earning $150,000 AUD.

	Expat A: $90,000 Income	Expat B: $150,000 Income
Formula 1	$0.15 × ($90,000 − $69,528) = $3,071 (No component over $129,717)	$0.15 × ($129,717 − $69,528) + $0.17 × ($150,000 − $129,717) = $9,028 + $3,448 = $12,476
Formula 2	10% × $90,000 = $9,000	10% × $150,000 = $15,000
Compulsory Repayment	$3,071 (lower of the two)	$12,476 (lower of the two)

As the example demonstrates, for Expat A earning $90,000, the new formula results in a compulsory repayment of $3,071, significantly less than the 10% of income alternative. For Expat B earning $150,000, the new formula also results in a lower repayment of $12,476 compared to the 10% cap of $15,000.

The practical impact of the new formula will vary depending on your income level, and it is worth calculating your expected compulsory repayment for 2026–27 in advance so there are no surprises when your worldwide income is assessed.

How Do You Report Your Worldwide Income as an Australian Expat?

Australian Expats with a HELP debt are required to report their worldwide income to the ATO by 31 October each year. This includes income earned from all sources, not just Australian income, but also the income earned in the country where you live and work, converted to Australian dollars at the average exchange rate for the income year.

You can report your worldwide income through:

• ATO Online Services via myGov (using the pathway: Tax > Lodgments > Report Worldwide Income); or

• An Australian registered tax agent, who can lodge on your behalf after the standard 31 October deadline depending on your circumstances.

If your worldwide income for the year is below 25% of the minimum repayment threshold, which in 2026–27 is $69,528, meaning below approximately $17,382, you may be able to lodge a non-lodgment advice rather than a full income report.

What Should Australian Expats Do Now?

Given the changes taking effect from 1 July 2026 and the recent updates to HELP debt balances, there are several steps Australian Expats with a HELP debt should consider:

• Check your current HELP debt balance. Log in to ATO Online Services via myGov to confirm your updated balance following the 20% reduction applied on 1 June 2025 and the 2.8% indexation applied on 1 June 2026.

• Understand your worldwide income. Work out your expected worldwide income for 2026–27 in Australian dollars so you can estimate your compulsory repayment obligation under the new formula.

• Consider voluntary repayments. If you are in a position to make voluntary repayments, doing so before 1 June each year will reduce the balance on which indexation is calculated, helping to slow the growth of your debt over time.

• Seek specialist advice. Given the complexity of worldwide income reporting, the choice of income assessment method, and the interaction between your HELP debt obligations and your broader financial position as an Australian Expat, speaking with a specialist adviser can help ensure you are meeting your obligations efficiently and avoiding unnecessary penalties.

Conclusion

The changes to Student HELP Debt Obligations for Australian Expats from 1 July 2026 represent a meaningful shift in how compulsory repayments are calculated, and will affect many Australians living and working overseas. Combined with the 20% reduction to HELP debt balances in June 2025 and the 2.8% indexation applied in June 2026, now is an important time for Australian Expats to review their HELP debt position and plan accordingly.

HELP Debt Obligations for Australian Expats are not optional; they apply regardless of where in the world you live, what your tax residency status is, and whether you have Australian-sourced income. Understanding and proactively managing these obligations is an important part of sound financial planning for Australian Expats.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the 'Contact Us' tab provided in the link below:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.