The Student Financial Supplement Scheme (SFSS) was a voluntary loan scheme for tertiary students to help cover their expenses while they studied
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 Australian Taxation 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 an SFSS debt so that they can take extra PAYG Withholding on your behalf to cover your obligations. For the 2022 – 23 year, your employer will start withholding SFSS if your wages exceed $930 per week.
When you have lodged your 2023 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 is calculated by your pay office and the extra tax is withheld from your wages, in most cases enough that will be enough to cover your SFFS obligation when your tax return is completed.
Reportable Fringe Benefits
In some cases, if you are receiving reportable fringe benefits 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, if 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.
New SFSS Rates
From 1 July 2022, all study and training loans are covered by one set of thresholds and rates.
The hierarchy in which compulsory repayments are applied to study and training loans is:
- HELP
- VSL
- SFSS
- SSL
- ABSTUDY SSL
- TSL
If you have a HELP debt and an SFSS debt, once the HELP debt is paid off, the ATO will start applying the payment to the SFSS Debt.
| Repayment income (RI) | Repayment rate |
|---|---|
| Below $48,361 | Nil |
| $48,361 – $55,836 | 1.0% |
| $55,837 – $59,186 | 2.0% |
| $59,187 – $62,738 | 2.5% |
| $62,739 – $66,502 | 3.0% |
| $66,503 – $70,492 | 3.5% |
| $70,493 – $74,722 | 4.0% |
| $74,723 – $79,206 | 4.5% |
| $79,207 – $83,958 | 5.0% |
| $83,959 – $88,996 | 5.5% |
| $88,997 – $94,336 | 6.0% |
| $94,337 – $99,996 | 6.5% |
| $99,997 – $105,996 | 7.0% |
| $105,997 – $112,355 | 7.5% |
| $112,356 – $119,097 | 8.0% |
| $119,098 – $126,243 | 8.5% |
| $126,244 – $133,818 | 9.0% |
| $133,819 – $141,847 | 9.5% |
| $141,848 and above | 10% |
Example of how the payment works
For example, if your income is $58,000, you will be required to repay 2% as your income is between $55,837 – $59,186 per annum, 2% of $58,000 is $1160. It is important to note that the repayment rate is subject to change each financial year, so it is best to check with the relevant government website for the most up-to-date information.
I’m with you folks. I have just paid $10,000 for both SFSS and HECS through tax. I feel tricked It seems grossly unfair. Lets do a class action.
how do we find out how much i owe? ive been taxed the last two times 1500 and 1800, i think i got the 7000 loan in 2003 so i wanna know how much i owe….
Never understood how this could have even been legal? Cash in $3500 of your benefit to the bank and they then give you $7000….to which you then have to pay back while accumulating a horrendous amount of interest on the loan calculated daily. WTF happened to the initial $3500 you gave them? Essentially they only gave you $3500 + the $3500 you gave them yet they end up collecting $10,500 + the ridiculous amount of accumulated interest??????
I recommend you all lodge complaints with the Commonwealth Ombudsman http://www.ombudsman.gov.au. This scheme was a government scheme, it took no account of the students ability to repay the loan or any assessment of their financial circumstances. It was also generally very poorly explained to us. If enough complaints go to the Commonwealth Ombudsman at once, they will have to investigate the systemic problems and raise them with the government. This is the most appropriate way to seek redress for this rort.
My mum got my sister and I to sign for this little did we know that she was spending the money whilst we were at uni and we still paid our own way through work adn doing chores etc. Little did we know that we would then be stuck with these very high “loans” I am very annoyed with this and now instead of getting ahead in life you just seem to take 2 steps back.
I can’t believe the government can do this to students and yet people who sit on clk pymts don’t have to pay it back it just a joke for all of us who were trying to get ahead with out careers and be something and not want to rely on welfare now get stung by the government and CLK.
i took out this loan when i was on a sole parent pension in 2001 to attend some retraining in health at tafe. I wasnt offered any other alternatives to help me gain employment and feel that i have been let down by the very system that was supposed to support me in training and finding employment. I wouldnt have been able to borrow that money from the bank as I was on a pension and I dont see how it was right for the government to ‘loan’ money to people to help them train for work which the government then collects taxes on!
I was just contributing to this conversation on http://www.iblob.org I think we need to spread our word and gather as many followers as possible then put a petition forward via TV media or government.
I was told that i would never have to pay back this loan by centrlink and my bank! that the threshhold would go up every year and unless i made a packet then i would never have to pay it back. I dont think 45k is a packet. Then 3 weeks ago i get a information statement asking me for $900. I feel scammed. I would never of taken this loan if i had known every year it increases. I feel like i was not informed properly and scammed!
Hello. I have again written to ACA for help. Can anyone tell me if there is any news on the class action front???? Cheers
Totally agree with everyone here – I got two loans in 2000 now up to $15,000. Really had no idea what I was signing – can’t blame anyone for that but myself really however I don’t think the loan should have been available in the first place because it was such a rip off. I wish I’d been a bit smarter at the time. I wish someone at the bank (I got mine through the Commonwealth Bank) had said to me “do you really know what you’re getting yourself into”?
I have an SFSS loan totalling almost $13,000 which was just over $8,000 back in 2001 when I finished borrowing money to study and survive. This is the first year that I have earnt over the threshold, and I will finally start to pay it off. I am keen to launch a class action against the government, commonwealth bank, and welfare agencies involved in this horrendous scam.
Students are the people who are struggling to become better members of society through education while big business, political parties and trades are subsidised with bucketloads of money.
Basically I have borrowed $4000 over 2 years and I now owe $13000. Everyone who has an SFSS debt should post on this site, stating how much it is. The power of numbers will be the only way it can be written off.
Education is truly not valued in this country, and this SFSS scam is proof.
I totally agree with all the comments here I to have written to the ATO and the Department of Finance without success and I am currently on my last option of writing to the ombudsman. Looking at these comments it is exactly the sentiments I have written about can not believe how badly we are all being F#@ked and no one cares. In these times with the government short on cash I think they will continue to screw us. What we need is some kind of register to see how many of us are out there (powere in numbers) Is anyone tech savy enough or know how to register this info safely (the only one who really knows how many of us are out there are the ATO/government and they are not going to help us. If there are enough of us and we go to the right members of parliment we may win this in the end but we need to have numbers (there must be thousands if not tens of thousands of us)
Something else that may help if to lodge a complaint with the Financial Services Ombudsmen. The number is 1300 780808 or email via http://www.fos.org.au
For me the information about the scheme was not clear enough and may have been misleading or deceptive!!!
I look forward to feedback on this matter.
I too have emailed ACA. I have also been looking into why it was axed in 2004. All that was mentioned was the cost to the Government and that the Youth Allowance was introduced. Can anyone advise if there was a legal age for signing financial contracts for loans in 1994?? Thanks.
I will write up a submission to the Á Current Affair’program if that fails we can hit Today Tonight. I think if we could get some publicity it may help towards giving this some exposure and possible legal support. Its was a government rip off that took advantage of low income earners and charged 100% interest straight off the bat (No wonder it disappeared). Anyway see how I go
Hello
I have been thinking about this con for a while. I too took out the loan when I was 16/17. I did not understand at the time that I would be forgoing $3500 of my Austudy. Was there a legal age that you had to be to enter into a loan in 1994??? I was told taht it would helo and that it would be interest a interest free loan. At the age of 17 it looked great. It was only when I started to get the statements that I realised I had been shafted. Can you please post the contact detail of the Solicitors so I too can contact them. Thanks there is obviously alot of people in the same boat. Cheers
I have just received a statement from the ATO in regards to my SFSS loan. Total shock. This is the first statement I have received in 9 years!! And – just as I have been reading everyone elses case – a significant increase in the balance. I have been stewing over it and I am so glad to have found this website. My big questions are – can anyone please tell me – what can we do about it? Has anyone had success with anything? I have read heaps about banning together for class action – so what, where and how? I would be very appreciative for any info.
And I quote from the centerlink website
Most loans require students to”trade-in” (or give up) part of their Youth Allowance, Austudy payment, ABSTUDY or Pensioner Education Supplement to receive double that amount as a Financial Supplement loan. For example, if you trade in $3,500 of your allowance over a year, you will get $7,000 as a loan.
You can make voluntary payments http://www.ato.gov.au/content/downloads/IND00249013n2789.pdf
It was a ripoff as you Would take a loan for 7k but have to give up 3500 of your payments to receive the $7000 e.g. For example, if you trade in $3,500 of your allowance over a year, you will get $7,000 as a loan. therefore you only got $3500 loan in reality.
So you would only receive half the amount of what you took the loan for (that’s worse than a loan shark) then you pay interest again on the loan lol
That type of loan is normally seen on a current affair as a loan shark ripping of the innocent.
I have all the correspondence from the original brochure, it also states that you can make voluntary payments when it is handed over to the tax office.
I think there is a nice name and shame in this taking advantage of low income earners as they needed this money the most. I had 3 toddlers at the time of this loan and I need the money but at what cost.
What’s the update with S&G.. anyone?
I think that sort of attention is good..
However, I will still write to my federal member to see what sort of response I can gauge..
Frankly, at this point, I just want the repayments to cease. It’s literally money wasting away as I barely repay anything due to indexation.
I would be interested in knowing what are the numbers of former students affected..
Hello all,
I clicked “submit a story” to A current affair.
If enough of us write they may notice!!
http://aca.ninemsn.com.au/contacts/
I too will contact the local member here.
I am VERY interested in CLASS ACTION. I have 2 loans that I took out and thought that I would be repaying half, not the full amount! Not the part of my benefit that I was entitled to as well!! I have been complaining about this for years. I will call slater and Gordon this week. Has anyone had any luck with Slater and Gordon?
I am contacting my federal member for parliament to see what changes can be made at a legislative level.
I just got my notice of assessment from the ATO. SFSS is at $26,832 and rising! This scheme was a total scam. At the time i was at uni and raising two young kids and needed the money. I had no idea it would end up like this! Something needs to be done.
CLASS ACTION NOW!!! CLASS ACTION NOW!!!
What is the process? How does one start the ball rolling? Surely a call to Slater & Gordon could start it, however how many people are required to get it up and running?
Hi all I spent many months back & forth between the Finance department of the ATO trying to get rid of this debt and have it waived. NO Luck though. I was over 40 & single mum who went back to study at Tafe as advised by Centrelink at the time that this was a good idea to help at at the time financially. I am now 59 years old & receive a $500 mature age rebate from ATO but pay back $1200 each year on the debt now that I have finally started to earn enough to pay it back. My debt went from $7000 to now over $14000 and I would definitely be in on a class action. Will contact Gordon & Slater myself
Hi,
I also have a supplement debt, have been paying this off for years now, each tax return, decent amounts and it does not seem to be getting decently smaller, the intrest does not help and I am quite frustrated with this loan.
I also feel it was not explained properly at the beginning and found to be paying back double of what I had realised. I also would like a solution for this and wondered if anyone found further information, and any information regarding the class action.
jane
I totally agree twith the above comments,my daughtewr and I would be very interested in joining a class action with Slater & Gordan, I was on a disability support pension and did the same traded $50 etc, my debt has risen to over $21,000, I have since gone back to work and have begun Salray sacrificing. I also dont think it was explained properly…. Pat
Wow – feel so much better knowing I wasn’t the only one. I realised it was a scam at the time, however I’m sure I’m not the only one where circumstances of necessity forced unintelligent financial decisions – which would have needed to made regardless based on the peanuts we were getting paid back between ’96 and ’02.
I think I only took the SFSS option for about 2.5 years early on in this period, but when I realised I already accrued significantly more debt than what I would have in total with HECS it was sufficient for me to say “enough”.
I’ve managed to pay off HECS purely through the tax system over the last 4 years (thanks to the inherent FBT implications related to salary sacrifice), however I’ve barely dented SFSS. The government continues to make more and more money off me with each annual CPI adjustment.
I should add that when applying for SFSS, I don’t believe there was enough information to clarify exactly how much CPI would affect me over the long term, especially after accruing a significant amount of debt. Based on circumstance I don’t think it would have affected my decision, however others could have been potentially dissuaded.
I sincerely hope something is done about this – people we trust in power should be looking after our best interests and not be allowed to take advantage of people, especially those who need help the most. I’ll keep tabs on this discussion, hopefully someone out there has the ability to stand up for us, at to least fight for our right to pay back what we owe, and not what some scamming politician(s) decreed by methods of profiteering.
CLASS ACTION I have just read through the comments and I am too in the same boat. One comment made note of a possible class action through Slater and Gordon. I think that it is so important that people band together on this issue whether it be through class action or direct written complaints to the Government. Please give an indication as to who has contacted S and G or the Government. I am sure you would agree that this particular scheme took advantage of mostly young people, some being from lower socio-economic environments. From what I have read there is a clear indication that most people went for the loan not ‘fully’ knowing what they were getting into. Being a Government program there should be much more accountability for such a SCAM. We must now do something about this. Please give indications of who has already made contact with Slater and Gordon and who is willing to do so. There are many grounds that can be worked on here.
Hi Z, thanks for that info. I was one who thought that we couldn’t make voluntary repayments. It’s good to know we can as I hate seeing how much my debt has grown over the years. It will be good when the debt is gone. Thanks again.
Yes I’m another that was scammed. Was thrown out of home at 16 (in my dad’s eyes he’d supported me to year 10 which was one more year of education that he’d gotten so he’d done his duty). No way I could afford rent, food on top of school so I took out the loan. Regretted it ever since. Am still paying it back even though now it’s based on my income as if I was only suporting myself with that income and I am the sole financial support for my family.
Is that a typo? You definitely -can- make voluntary repayments to your SFSS loan, just like to your HECS/HELP debt. The ATO website even has information on how to make Bpay payments like a ‘regular’ bill in netbank.
http://www.ato.gov.au/individuals/content.asp?doc=/content/00249013.htm&page=23&H23
I have just started work and will be forced to make compulsory payments, and have started considering making these voluntary payments to pay it off quicker.. so I don’t have to think about this scam loan any longer.
have you folk seen this?:
http://www.ato.gov.au/individuals/content.asp?doc=/content/00102966.htm&page=1&H1
seems to have the answers to your questions
good luck
The link to the ATO website describes how you can voluntarily repay your SFSS loan, the ATO site talks about a 5 year window that you have between when the loan was taken out and when the ATO takes control of recouping the money.
As the last loan for the scheme was given in 2003 then the last date for the voluntary repayment was 5 years later in 2008. Any who have the loan now in 2010 certainly can not make any voluntary payments.
totally agree with this rip off tactic and wondering what actually happens if you never earn near the threshold, does that then mean you do not repay the loan at all??
have just realised i have not received statements for a while now and it must be just adding up and up…..
it is wrong you cannot just pay it out if you happen to come into money, or even via a bank loan! if this loan was taken away it was for a good reason and the ones that were sucked in (silly me) should have some sort of compensation in the way of a reduction in interest at the very least!!
yes! I agree with you all and a call action should definitely be initiated.
I feel exactly the same way as Vicky, as everyone else for that matter.
Please let us know when a class action is initiated!
i have called slater and gordon and put the idea of a class action to them, if people are interested please contact them i think the more people out there who contact slater and gordon could mean that they take on our case! i just want the 100% interest i paid returned back to me, the austudy i am entiled to. If a bank was changing these rates thaey would of been run out of town, why should a government get away with praying on the poor! sophkou@hotmail.com
hi everyone,
i am so glad to hear i am not the only one who feels scamed, class action, lets do it!!!
I completely agree with all of the above. I have two of these ‘loans’, and was completely led astray, and unaware of the circumstances surrounding the ‘loans’ at the time of taking them out. What type of ‘loan’ sucks you in to ‘trading in’ $50 of centerlink money to receive $100 (and then pay back $100 plus interest)? Ridiculous. I used this money to complete my university degree. My parents were both incredibly hard workers, but were both low income earners (from the country) and could not afford to subsidise me living in Melbourne to complete the degree. Surely there is some action that we can all take to get the previous ‘loan’ amounts reduced to 0??
I have one of these and I now have three children and it seems will never earn over the threshold amount to repay this loan.It plays on my mind alot and I would like to clear this debt as it is growing before my very eyes. Clearly something needs to be done. The ATO should be making changes, so that we can make our own repayments. Otherwise this is blackmail – with no way out. Anybody who has any answers, please post them here.
Cheers
@ Jo, I finished studying in ’94 with a 4k debt. It took 15 years for my circumstance to align so my income was greater than the threshold. In that time the debt increased to 6k.
It is not a huge increase from 4k to 6k over that period of time, but to get the 4k of debt I traded off 2k of Austudy so in reality my debt has increased from 2k to 6k in 15 years. 🙁
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.
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.
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 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, https://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.
Hi Karen the SFSS is the old Austudy scheme back from 1993- to 1998. I have fallen into this too. and Im trying to fix it. best of luck
Lidia
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.
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.
Back in the mid to late 1990s my husband and I had to access SFSS as we were both at Uni full time with 2 little children and couldn’t survive without it on Centrelink. We are still paying this loan off after 14 years!!! It was so long ago now but I told my husband last night that I remember us sacrificing $3500 in centrelink payments to get $7000 for the year. A major “rip off”. So we were given $3500 but are paying back $7000. Hubby doesn’t remember this at all and thinks I’m mistaken but after reading your post I know I’m right. We got $7000 a year for 4 years to help us get our degrees and live. I’m going to throw a party once this thing is finally done and dusted.
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.
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?