If you took out a Student Financial Supplement Loan between 1993 and 2003, you will have an amount to repay if your repayment income is greater than the thresholds in the table below.
The repayment income is your taxable income plus any net rental losses, total reportable fringe benefits amounts and exempt foreign employment income.
Hopefully you have told your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2008 – 09 year your employer will start withholding SFSS if your wages exceed $799 per week.
Unfortunately with the SFSS there is no provision to make any voluntary payments.
At the end of the year when you do your tax return, based on your reparment income the ATO will calculate how much SFSS will need to be paid
The SFSS that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
2007 – 08
| Repayment income | Repayment rate |
| Below $39,825 | Nil |
| $39,825–$48,896 | 2% |
| $48,897–$69,405 | 3% |
| $69,406 and above | 4% |
I finished uni early because I was pregnant (end of 1995). I am now a married mother of 2 and have only been able to get casual jobs. My income has never been, or will be as far as I can see, $39,825 or more because I have been out of the workforce raising children and I my uni qualifications are out of date so no employer would employ me.
The loan keeps increasing every year. I am worried that I will never be able to repay it and am concerned that if I die the loan will be taken out of anything I may have in my will. It’s not that I expect I will have anything much but will my children or husband be burdened with this loan?
The only time the SFSS loan is written off, is when we die!
I have a small SFSS loan, of $4000, my concern is that with the accumulating interest, if I do suddenly get past the threshold, I will then have to pay it, at a time when I might need the money.
It was such a rip off, trading in welfare payments for the loan.
Oddly some people would be better off taking out a loan to pay it off, and then go bankrupt imho.
Unfortunately once the SFSS is passed into the hands of the ATO their isn’t any options to make a voluntary payment. The only choice is to pay it off once your income has passed the relative thresholds.
@ Em, I agree it was a rip off, trade in $50 of Centrelink payments and receive $100 of SFSS and then pay back $100 of SFSS.
I got my suppliment loan out in 1999 and am still paying it back – I don’t get a tax return – I get a tax debt. The last couple of years I end up paying out my tax return onto the loan and then some – only for the ATO to charge me another $500 increment.
I wouldn’t have been able to pay rent and study if I didn’t get the loan out because of the pittiful fortnightly benefit handed out to students. I have worked ever since and pay enough tax into the system without the government taking more cash off me.
If the federal government wants to really help australians they should provide better financial support for those who are trying to gain qualifications and participate in working society.
I have just gone up a tax bracket & found that my SFSS loan has sky rocketed with the annual indexing rate. Everyone I talk to is confused about what the SFSS is. I am getting plenty of info on HECS.
I cant see that going up a tax bracket is going to benifit me, things look worse than they did before.
As hard as I work at paying this off, it continues to grow. Good scheme? No, good scam by by the government. Does this debt die with me or will my kids end up paying for my misinformed decision.
Oh and if anyone thinks Salary sacrifice is going to help, remember the tax dept has got you there too, dont forget you have to gross up your wage, that may throw you into yet a higher tax bracket and youll have to pay more. Confused… so am I.
@ Karen, please look at my post re tax rates, http://www.accountantplus.com.au/wordpress/?p=239, the next rate change is at 80k. The scheme no longer exists so as it feels like you will never pay it off and if you have gone into the next tax bracket it shouldn’t take long.
As you say if you Salary Sacrifice, the SFSS will be calculated on the grossed up amount, more will be paid, but the loan will be reduced quicker. Salary Sacrifice is not taxed.
I have just finalised my SFSS debt, I to was scammed, trade off $50 of Austudy to get $100 of SFSS and then pay $100 back, 100% return for the Gov’t plus CPI adjustments.
At least it was realised eventually that allowing the Commonwealth Bank to exploit students with financial hardship was unacceptable and the ‘scheme’ was eventually axed (although this was not the reason it was cancelled i believe). I am trying to find further information if anything has been put to government, has anyone anywhere tried to push for reasonable changes to the SFSS and the conditions binding the unfortunate people who took out these ridiculous loans. Has there been any dialogue regarding a change in policy to the SFSS?? The fact that voluntary payments are not an option after 5 years is unacceptable and personally i believe all SFSS should be cut by 50% considering those with the debt essentially pay back double the loan plus indexing (ie. interest). I was unfortunately naive and struggled financially through uni so took out two of these loans, and although I blame myself for entering the agreement unaware of the conditions, it infuriates me that such a scheme could be introduced in the first place which so clearly exploits people trying to further themselves who are most vulnerable. Those coming from lower economic circumstances were handed on a plate to the Commonwealth Bank by the government, and effectively allowed to be exploited. If there is any further information about this, links, anything please post here as this was the only forum/information I was able to find online about this online. I believe government needs to revise this, and we should not be left to consider getting a loan and going bankrupt to pay off the SFSS as probably the most viable option.
I totally agree with everything already posted. I have a large SFFS that I need to pay and I have the ATO threatening to take me to court over it. I was 16 years old when I was advised that I could take out one of these “loans”. At the time my family was struggling through the after effects of the recession and my money was used to help my mum pay the mortgage to keep the house. Im not sure how the government could collude with the commonwealth bank to scam unsuspecting students but something needs to be done about this. I have children of my own now and simply cant afford to pay the SFSS off. If there was ever talk of a class action or some legal representation that may be made available to help us all with this situation, I would be very keen to find out and get on board.
Honestly, I am so embaressed that I was so naive and desperate to take this loan out. It has made me feel so much better to read that other (intelligent) people made the same mistake.