AUSTRALIAN TAXATION OFFICE
HIGHER EDUCATION SUPPORT ACT 2003, TRADE SUPPORT LOANS ACT 2014, STUDENT ASSISTANCE ACT 1973
Factor to Index an Accumulated HELP, TSL or Financial Supplement Debt
I, FRANCES MCMORROW, of the Australian Taxation Office, HEREBY NOTIFY, pursuant to section 140-20 of the Higher Education Support Act 2003, section 34 of the Trade Support Loans Act 2014 and subsection 12ZF(7A) of the Student Assistance Act 1973 that 1.018 is the HELP, TSL and Financial Supplement debt indexation factor for 1 June 2019 to be used in working out accumulated HELP, TSL and Financial Supplement debts for the 2018-2019 financial year.
In accordance with section 140-10 of the Higher Education Support Act 2003, section 32 of the Trade Support Loans Act 2014 and subsection 12ZF(6) of the Student Assistance Act 1973, the HELP, TSL and Financial Supplement debt indexation factor is the number worked out to three decimal places using the formula:
the sum of the index number for the March 2019 quarter and the index numbers for the three immediately preceding quarters
divided by
the sum of the index number for the March 2018 quarter and the index numbers for the three immediately preceding quarters,
where index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the eight capital cities, published by the Australian Statistician in respect of that quarter.
Indexation factor for 1 June 2019 = Mar19+Dec18+Sep18+Jun18
Mar18+Dec17+Sep17+Jun17
= 114.1 + 114.1 + 113.5 + 113.0
112.6 + 112.1 + 111.4 + 110.7
= 454.7 divided by
446.8
= 1.018 (rounded to three decimal places)
The indexation factor is 1.018 and the effective percentage increase is 1.8%.
Overview
The Australian Taxation Office Higher Education Support Act 2003, Trade Support Loans Act 2014 and Student Assistance Act 1973 collectively aim to regulate the indexation of accumulated Higher Education Loans Program (HELP), Trade Support Loans (TSL), and Financial Supplement debts. Enacted by the Australian Parliament, these Acts are designed to ensure that debts related to student loans and financial assistance are adjusted in line with economic changes, specifically inflation, thereby maintaining the real value of these debts over time. The policy objective is to provide a fair and consistent method of indexation that reflects the actual changes in the cost of living, ensuring that the burden of debt remains equitable for borrowers as economic conditions evolve. This indexation mechanism is crucial for the ongoing sustainability and fairness of the financial assistance provided to students and trainees under these Acts.
Scope and Application
The Australian Taxation Office Higher Education Support Act 2003, Trade Support Loans Act 2014 and Student Assistance Act 1973 apply to individuals and entities involved in the Higher Education Support Act, Trade Support Loans Act, and Student Assistance Act, respectively, including educational institutions, students, and financial entities that facilitate these loans and assistance programs. These Acts cover conduct and transactions related to the provision, repayment, and indexing of debts associated with Higher Education Support Loans, Trade Support Loans, and Financial Supplements. The jurisdictional reach of these Acts is national, encompassing all states and territories of Australia. Exclusions or exemptions from the application of these Acts are not detailed in the provided text, though typically such legislation may exclude certain categories of loans or debts not falling under the specified Acts. The Acts may extend or restrict their application through subordinate instruments such as regulations or determinations, which are not elaborated on in this notification.
Key Provisions
The Higher Education Support Act 2003, the Trade Support Loans Act 2014, and the Student Assistance Act 1973 all reference the indexation of debts related to Higher Education Loans Program (HELP), Trade Support Loans (TSL), and Financial Supplement debts. Specifically, the legislation identifies the indexation factor for the financial year 2018-2019 as 1.018, effective from 1 June 2019 (sections 140-20, 34, and 12ZF(7A)). This indexation factor is used to calculate the accumulated HELP, TSL, and Financial Supplement debts, ensuring these debts are adjusted for inflation over the specified period. The calculation of this factor involves using the All Groups Consumer Price Index numbers from the Australian Statistician, specifically the weighted averages for the March quarters of 2019 and 2018, as well as the three preceding quarters for each year (sections 140-10, 32, and 12ZF(6)).
These Acts impose obligations on various parties, including the Australian Taxation Office, borrowers of HELP, TSL, and Financial Supplement debts, and other relevant entities. The Australian Taxation Office is responsible for calculating and notifying the indexation factor annually, ensuring it is based on the latest available consumer price index data. Borrowers must ensure their debts are correctly indexed according to the factors provided, which affects their repayment obligations. Financial institutions and other entities involved in the administration and collection of these debts must also comply with the indexation provisions to accurately reflect the adjusted debt amounts.
Failure to comply with the requirements of these Acts can result in various consequences. For instance, if the Australian Taxation Office fails to correctly calculate or notify the indexation factor, it may lead to incorrect debt assessments for borrowers. Borrowers who do not properly index their debts or who fail to make payments based on the indexed amounts may incur additional interest or penalties. The legislation does not explicitly outline criminal or civil penalties for these failures, but it does imply that non-compliance could result in financial discrepancies and potential disputes over debt amounts. Additionally, any entity that does not adhere to the indexation requirements could face regulatory scrutiny or penalties imposed by the relevant authorities.