Higher Education Loan Program (HELP) & Repayments Thresholds 2013/14
The Australian Government is not only serious about promoting its business and tourism sectors but also invests in the human talent. If one finds it untrue then please take a look at the facilities and support being offered by Australian Government to the accounting and tax return Sydney students in every city. Are you familiar with the term HELP?
Higher Education Loan Program is the best what any student could get in any part of the world. What it does is allows the students to choose the career path of their choice by getting admission into any university for gaining higher education while the fee is being paid through loan borrowed money. Three factors come into play for the purpose of amount to be borrowed. The factors are eligibility, university and specific circumstances. There are two basic concepts which one must understand before going ahead with application of the Higher Education Loan Program. Being enrolled in certified private institution or university, Commonwealth fee paying place or support place could be offered to you. On the other hand, studying in a certified VET provider would enable you to get status of fee paying student or subsidized state student.
There are different types of loans being offered by the Australian Government to support students in the best possible manner. We have briefly discussed all these types below for your better understanding.
HELP via HECS – It is the scheme where loan is provided to students only who are eligible and Commonwealth supported. It helps in making student contributions via loan amount or significant discount in fee.
HELP via FEE – As simple as its name, the loan is provided to students who are eligible for the purpose of making fee payments directly.
HELP via SA – It is the loan type which only pays specific part or whole payments related to student amenities and services. Students in huge number apply for this loan type.
HELP via OS – The loan is specifically created to support Australian residents studying overseas in an approved institution. It is also only provided to Commonwealth supported students who are eligible.
HELP via VET FEE – Those studding tax return in Melbourne involved in vocational education for higher level and are eligible could get this loan to pay the complete fees. However, only VET institutes which are certified can be considerable.
2013/2014 HELP Rates for Repayment
The particular loan scheme was introduced by Australian Government in 2005 realizing the support needed by students for pursuing their careers and dreams. HELP replaced the Higher Education Contribution Scheme in 2005. The important question to ponder is when one has to repay the loan? This process starts when your repayment income is greater than minimum amount of threshold. When you reach certain repayment income threshold, it becomes compulsory to make the payments. The rates change every financial year. The important stat to remember is you are not implied to make payments if your repayment income is not above $51,308. We have briefly discussed the varying rates of repayment for Higher Education Loan Program. The rates vary only due to difference in income.
- 0% in case HRI is lesser than $51,308
- 4% repayment rate for HELP Repayment Income falling in category of $51,309 to $57,153
- 5% applies to $57,154 – $62,997 repayment income
- 5% is implied upon HRI in range of $62,998 – $66,308
- 5% rate of HRI is applicable to range of $66,309 to $71,277
- 6% applies to HRI between $71,278 – $77,194
- 5% is the rate for range of $77,195 to $81,256 repayment income
- 7% is applicable to repayment income of $81,256 to $89,421
- 5% on HRI ranging from $89,422 to $95,287
- 8% on any HRI exceeding $95,287
The entire compulsory repayment amount for the loan is calculated while processing of tax return is done. The repayment income is kept as base for this loan. For better understanding of this concept let’s clear the repayment income for HELP.
The repayment income for HELP consists of several factors such as:
- Income tax applied upon
- Rental loss or other net losses due to investments
- Amount of fringe benefits to be reported
- Super contributions which could be reported
- Exemption of income generated via overseas employment
There is serious responsibility on the student who would like to provide bookkeeping services Sydney in a future and has gained the loan via HELP. Repayment is a must if your income is greater than above mentioned minimum threshold. ATO provides information to the authorities handling HELP cases about any defer occurring in payments on other loans. Every individual has a separate account which keeps up to date record for repayments, indexation and debts. The account information can be accessed in case you want to know about the amount of repayment which is compulsory. There are several things to look for when applying for HELP.
Accountants Sydney support the idea that Australian Government and Australian Taxation Office consider small businesses as the main source of future well being of the country. The authorities plan to support and encourage small business investors in every possible way. For this purpose numerous types of schemes, loans and other supporting tools have been introduced by the government. On the other hand, people already involved in doing business are offered with different types of discounts and concessions which help them reduce the tax payables. Every businessman in Australia is aware of the term “Small Business CGT Concessions”. Everybody is not able to understand the actual working of this term. For this purpose, you need to know the exact details and fulfill all necessary requirements.
Small Business Entity
Most businessmen don’t know what criterion makes a particular business qualify for being “small business entity”. Specific criterion has to be met for a venture to be considered small business entity and avail CGT concessions.
As Accountant Sydney is saying:
Small business entity can be a trust, individual, company or partnership which has less than $2million aggregated turnover produced from business activities. The aggregated turnover is calculated by adding annual turnover and turnover of relevant business entities. Here are the 3 methods to find out whether you meet $2 million aggregated turnover condition.
- The venture is small business entity if previous financial year’s aggregated turnover was lesser than $2million.
- Estimate aggregate turnover for current financial year can be calculated. If it is estimated to be lesser than $2million than the venture can be considered small business entity if the past two year’s aggregated income was also less than $2million.
- In some cases, the first two methods cannot be applied. Here the owner needs to wait for the financial year to end and calculate the actual aggregated turnover which occurred.
Getting To Know The Different CGT Small Business Concessions
There are 4 major types of small business CGT concessions. You might not be able to get the particular type of concession which you want. Every concession has a basic criterion. The particular concession will be availed by you if the business meets its conditions and requirements.
- Active Asset 50% Reduction
- 15year Exemption
- Retirement Exemption
Active Asset 50% Reduction
This type of concession can only be availed if you meet the basic requirement of holding active asset for the time span of 12 months or more. In this way, you can apply for reduction of capital gain up to 50%.
This concession allows you to have zero capital gain when you earn assessable income by selling the active asset. However, the condition of being at least 55 years of age and holding asset for 15 years or more has to be met in order to avail the exemption. The concession can also be availed by permanently incapacitated individuals. Meeting the 15year asset holding criterion is a must.
The small business rollover concession can be gained with the sale of active asset while benefiting from deferring partial or complete capital gain for minimum 2 years. However, there is a condition applied to it. The concession can also be availed if owner incurs expense on existing asset for capital improvements or acquires any replacement asset.
For individuals who are above 55years can avail this discount type. Up to $500,000 of capital gains can be exempted for lifetime of an individual on sale of all active assets with this concession. On the other hand, if you are under 55years age then the amount of capitals gains exempted can be transferred to retirement saving account or super fund.
No matter which concession you are willing to gain, it is must to fulfill its specific requirements before applying. An individual can apply for as many concessions as he/she wants till the total capital gains amount becomes zero. It will lead to significant tax benefits. There will be no amount of capital gains on which the tax could be applied, resulting in plenty of money being saved for you. However, it is not possible to meet the conditions of small business CGT concessions every time. Before applying also confirm about the rules regarding the order of concessions application which imply to your case. Tax (financial) adviser can help you calculate capital gain in your tax return Sydney in a better way. In this way, you will be able to gain appropriate advice on which concession to apply for and when. A professional’s advice should always be considered valuable.
Basic Conditions To Qualify For Small Business CGT Concessions
- Aggregate turnover of the venture to be lesser than $2million
- Net value of assets to be not more than $6million
- Fulfilling the ownership and asset usage criterion
- Meeting the requirements related to active assets
- One condition from the below mentioned two conditions has to be satisfied if the asset is interest in a trust or share in company:
- Entity applying for concession should be CGT concession stakeholder
- 90% business participation should be held together by the CGT concession stakeholders in a trust or company.