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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
STUDENT LOANS (OVERSEAS DEBTORS
REPAYMENT LEVY) BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Education and Training,
the Honourable Christopher Pyne MP)
STUDENT LOANS (OVERSEAS DEBTORS
REPAYMENT LEVY) BILL 2015
OUTLINE
This Bill provides for a levy to be imposed for a defined group of overseas
debtors to be calculated in line with provisions added to the Higher Education
Support Act 2003 (HESA) and the Trade Support Loans Act 2014 (TSL Act)
by the Education Legislation Amendment (Overseas Debt Recovery) Bill
2015.
This will strengthen the legislative basis for the programme and the capacity
of the Australian Taxation Office to collect this debt through current tax
administration mechanisms. The Bill provides for the recovery of both new
and existing Higher Education Loan Programme (HELP) and Trade Support
Loan (TSL) debt from overseas resident debtors.
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FINANCIAL IMPACT STATEMENT
The measure will save more than $25 million from 2015-16 to 2018-19 and
more than $150 million over 10 years in fiscal balance terms.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
STUDENT LOANS (OVERSEAS DEBTORS REPAYMENT LEVY)
BILL 2015
This Bill is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of the Bill is to impose the requirement to repay Higher
Education Loan Programme (HELP) and Trade Support Loan (TSL) debts
while overseas as a levy. Repayment obligations will only commence once
the individual reaches the minimum repayment threshold.
Human Rights Implications
The Bill may be perceived as having minor human rights implications in
relation to the right to an adequate standard of living found in the International
Covenant on Economic, Social and Cultural Rights, although the Bill is not
considered to limit this right. While the measures in this Bill may reduce a
person's disposable income, and therefore a person's standard of living,
repayment obligations would only apply to those earning above the Australian
minimum repayment threshold. A person who was not earning income, or who
was earning a low income, would not be faced with any requirement to repay
and therefore no reduction in their living standard.
The right to freedom of movement is found in Article 12 of the International
Covenant on Civil and Political Rights. The Bill may be perceived to limit this
right. By creating the obligation to make repayments while overseas, it may be
considered to be placing financial barriers on those who wish to leave the
country. This is not considered a practical limitation, as any financial
imposition would only affect those earning more than the equivalent of the
Australian minimum repayment income, and would not impact low income
earners or those without incomes.
The measures in this Bill are considered compatible with human rights.
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STUDENT LOANS (OVERSEAS DEBTORS REPAYMENT LEVY)
BILL 2015
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides for the Act to be cited as the Student Loans (Overseas
Debtors Repayment Levy) Act 2015.
Clause 2 - Commencement
Subclause 2(1) inserts a three column table setting out commencement
information for various provisions in the Bill. Each provision of the Bill
specified in column 1 of the table commences (or is taken to have
commenced) in accordance with column 2 of the table and any other
statement in column 2 has effect according to its terms.
The Bill, once enacted, will commence at the same time as Schedule 1 to the
Education Legislation Amendment (Overseas Debt Recovery) Act 2015
(Overseas Debt Recovery Act) (i.e. on the later of the day after that Act
receives the Royal Assent, or on 1 January 2016).
Any information in column three of the table is not part of the Act.
A note explains that the commencement times in the table will not be
amended should the provisions of this Act be amended by any future Act.
Clause 3 - Definitions
Clause 3 provides for the following definitions of terms used in the Bill:
Income year has the meaning as provided in subsection 995-1(1) of the
Income Tax Assessment Act 1997, which is currently as follows:
income year: the basic meaning is given by subsections 4-10(2) and 9-5(2).
Some provisions refer to a particular income year. (They may describe it in
different ways: for example, as the income year ending on 30 June 1998, or
the 1997-98 income year.) For an entity that adopts an accounting period in
place of the particular income year, the reference includes:
(a) the adopted accounting period; or
(b) if the adopted accounting period ends under section 18A of the Income
Tax Assessment Act 1936:
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(i) in relation to the commencing of the income year--the adopted
accounting period (as ending under that section); or
(ii) in relation to the ending of the income year--the accounting period
ending under that section on the day on which the adopted accounting
period would (but for that section) have ended.
Note 1: The Commissioner can allow you to adopt an accounting period ending on a day other
than 30 June. See section 18 of the Income Tax Assessment Act 1936.
Note 2: An accounting period ends, and a new accounting period starts, when a partnership
becomes, or ceases to be, a VCLP, an ESVCLP, an AFOF or a VCMP. See section 18A of the
Income Tax Assessment Act 1936.
Overseas debtors repayment levy means the levy that is payable under
section 154-16 of HESA, or section 47A of the TSL Act.
Section 154-16 would be inserted into HESA by item 2 of Schedule 1 to the
Overseas Debt Recovery Act.
Section 154-16 provides that a person is liable to pay the Commonwealth a
levy of the amount calculated under new section 154-32 (see item 3 of
Schedule 1 to the Overseas Debt Recovery Act) if:
the person is a foreign resident during an income year; and
the person's assessed worldwide income for the income year
exceeds the minimum repayment income for the income year; and
on the first of June immediately before an assessment is made of the
person's income for that income year, the person had an accumulated
HELP debt.
Section 47A would be inserted into the TSL Act by item 6 of Schedule 2 to the
Overseas Debt Recovery Act.
Subsection 47A(1) provides that a person is liable to pay to the
Commonwealth, in accordance with Division 4, a levy of the amount
calculated under new subsection 47A(2) if:
the person is a foreign resident during an income year; and
the person's assessed worldwide income for the income year
exceeds the minimum repayment income for the income year; and
on the first of June immediately before an assessment is made of the
person's income for that income year, the person had an accumulated
TSL debt.
Clause 4 - Imposition of levy
Clause 4 imposes the overseas debtors repayment levy.
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Clause 5 - Amount of levy
Clause 5 provides that the amount of a person's overseas debtors repayment
levy is the amount that is payable by that person in accordance with section
154-16 of HESA, or section 47A of the TSL Act.
The obligation to pay the levy and the amount of levy payable will mirror the
repayment rates applying to debtors with Australian income under HESA.
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