How do I repay my debt if I am a payee under pay as you go (PAYG) withholding?
Payments from more than one payer
Holiday or temporary jobs
No compulsory repayment required because of low family income
How do I repay my debt if I am a payee under pay as you go (PAYG) withholding?
If you receive payments for work or services, benefit or compensation payments, retirement payments or annuities, you may have amounts withheld from your payments under the pay as you go (PAYG) withholding system. If amounts are withheld from your payments, you are a ‘payee’ for PAYG withholding purposes. The entity making the payment is your ‘payer’ - your employer in most circumstances.
You must advise your payer that you have an accumulated HELP debt on a Tax File Number (TFN) declaration or Withholding declaration. When you advise your payer that you have an accumulated HELP debt, your payer will withhold additional amounts from your pay once you earn $728 or more per week in the 2006–07 income year.
The additional amounts withheld are to cover any compulsory repayment that may be calculated for the year. These amounts are not credited to your account during the year but form part of the amount shown on your annual PAYG payment summary at ‘total tax withheld’ and on your income tax notice of assessment at PAYG withholding credits. Your compulsory repayment will not be calculated until your income tax return for that year is processed. If you had too much withheld during the year, and you have no other outstanding debts, the Tax Office will refund the excess to you.
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Payments from more than one payer
If you receive payments from more than one payer, you must advise each of your payers that you have an accumulated HELP debt. In 2006–07, your payer is not obliged to withhold additional amounts from your pay until you earn $728 or more per week from your job. However, if your payments from all jobs are more than the minimum repayment threshold for the income year, a compulsory repayment may be raised on your next income tax notice of assessment. If you want one or more of your payers to withhold additional amounts to cover any compulsory repayment, you should complete the Upwards variation agreement, contained in the Withholding declaration, and give it to your payer/s. If you do not do this, you may have to make a lump sum payment when you receive your notice of assessment.
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Holiday or temporary jobs
If you have a holiday or temporary job and you earn $728 or more per week in the 2006–07 income year, but your repayment income for the income year will remain below the minimum repayment threshold, there is no need to have additional amounts withheld. If you do not want your payer to withhold additional amounts for your HELP debt, phone the Tax Office on 1300 360 221 for a 2007 PAYG income tax withholding variation application. You should only apply to vary your amount withheld if you are sure that your repayment income for the year will be below the minimum repayment threshold.
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No compulsory repayment required because of low family income
If, due to low family income, you are entitled to a reduction of Medicare levy or you do not have to pay the Medicare levy, you will not have to make a compulsory repayment for that year. You can provide your payer with a completed Medicare Levy Variation Declaration, available from the Tax Office. Your payer will then stop withholding additional amounts for that year. For more information about repayments, contact the Tax Office.
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