The Student Financial Supplement Scheme (SFSS) was a voluntary loan scheme for tertiary students to help cover their expenses while they study
The SFSS closed on 31 December 2003 and no new loans have been issued. Existing Financial Supplement debts will continue to be collected through the tax system.
If you took out a Student Financial Supplement Loan between the years of 1993 and 2003, you are required to repay some of your debt if your Repayment Income (RI) is greater than the thresholds in the table below.
The Repayment Income (RI) is your taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income.
Hopefully, you have notified your pay office that you have a SFSS debt so that they can take extra PAYG Withholding on your behalf to cover your obligations. For the 2018 – 19 year your employer will start withholding SFSS if your wages exceed $999 per week.
When you have lodged your 2019 tax return, based on your Repayment Income (RI) the ATO will calculate how much SFSS will need to be paid
Unfortunately, the SFSS has no provision to make any voluntary payments.
The SFSS that is calculated and the extra tax that has been withheld out of your wages by your pay office is in most cases enough to offset each other.
Reportable Fringe Benefits
In some cases, if you are receiving reportable fringe benefit it may be wise to ask your pay office to withhold extra PAYG Withholding to cover a possible shortfall in SFSS at the end of the year.
I have been asked by clients, is it worth salary sacrificing and receiving a reportable fringe benefit with the possibility of paying extra off the SFSS loan? Yes is my answer, the amount of tax saved by salary sacrificing will far outweigh any extra payments off your SFSS loan, keeping in mind that any extra payments will mean that your loan will be paid off earlier.
|Repayment income (RI*) thresholds||Repayment rate|
|$51,957 – $64,306||2%|
|$64,307 – $91,425||3%|
|$91,426 and above||4%|
*RI= Taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income.