The Education Legislation Amendment (Overseas Debt Recovery) Bill 2015 has been introduced into parliament. The Bill proposes to implement the 2015/16 Budget measure to extend the Higher Education Loan Program (HELP) to debtors residing overseas.

For these debtors, the Bill creates an obligation to make repayments on their HELP debts based on their total Australian and foreign-sourced income, known as their worldwide income. This will be imposed as a levy through the Student Loans (Overseas Debtors Repayment Levy) Bill 2015. Only those debtors living overseas and earning above the minimum HELP repayment thresholds will be required to make payments towards their HELP debts. Repayment rates and thresholds will mirror those applying to debtors residing in Australia.

The new arrangements will apply from the later of 1 January 2016 and the day after the Bill receives assent. From this date, debtors going overseas for more than six months (183 days) will be required to register with the ATO, while those already living overseas will have until 1 July 2017 to register. Repayment obligations will commence from 1 July 2017, for income earned in the 2016/17 year.

It should be noted that the Bill contains consequential amendments to ITAA 1936 and ITAA 1997 to ensure that overseas HELP debt repayments are not allowable self-education expenses for Australian income tax purposes.