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Discussion Starter #1
Hi,

My wife is Australian and we're looking at moving to Australia from the US in the next few years.

She left the country back in 2006, and has never paid back her HECS debt. Turns out that back in 2016 there was a law passed requring expats to report income and have a compulsory repayment. Additionally there was a fine for failing to do so.

Since we've not been exactly in the loop as far as Australia goes, we didn't know about any of this until now. My fear is if she reports past income now, there will be many thousands, or tens of thousands, of past due dollars that suddenly have additional interest/fees as if an unpaid bill from years ago (HECS itself is interest free, but has yearly inflation adjustments). Additionally, there may or may not be multiple fines for failing to report in the past.

Here is my question:

It is possible to make voluntary repayments of HECS debt. If we were to pay everything from the current HECS account before moving back, would there still be any fines / past bills, or would this no longer be an issue becasue the original debt was paid off? I thought that perhaps if we just did voluntary payments over the next few years, it would be paid off - but technically we've still never met the 'compulsory payment' requirements.

The concern would be specifically any fines for failure to report income, and then if there was a bill in 2016, 2017, 2018, and 2019 there would potentially have been rolling general interest on those bills. Would there even be a request to retroactively file this overseas income thing if there was no longer a hecs debt to pay (It's different from a tax return - she doesn't need to do those)

Obviously this seems to be an issue only if we return, but we also don't know if it would potentially cause other problems (like for example, getting me, a US citizen, permanent residency status despite being married for seven years :))

I have to assume she isn't the only one in this situation - I can find tons of articles of what happened back in 2016/2017, but nothing from people years later just encountering this problem now. I was hoping someone might have experienced something similar.

Thanks so much!
 

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Discussion Starter #3
following up..

Thanks!

Yeah, I actually know all about how to find out the total now, and how it's supposed to be paid now.

The question is sort of outside those bounds - ie, if we just did voluntary payments (which we know how to do) and paid it off completely before returning to the country, would there any lingering consequences of her failing to comply with this stuff from back in 2016 and beyond?

Basically AU has no idea how much she has made while abroad. We've had two children in the meantime, so it was pretty disruptive to work anyhow...

BUT, my fear is if I get the taxation office involved, they'll start asking some specific questions and want a massive amount of back-owed compulsory payments over the past four years, which now would have additional interest as being a bill. Additionally, there's the fine for not submitting in the first place.

My hope and assumption was that all of that is to try and make sure people actually PAY this hecs thing. If it was *already paid off* would they still be looking backwards to see that it wasn't paid into when it should have been? Is someone going to say... "Welcome back to Australia! I see you've paid off your HECS debt 100%, but you never did certify the overseas income that we use to calculate what percentage of your HECS debt you're supposed to paid each year! Please submit that now"

I just don't see the mechanism of why or how they'd retroactively ask because it's not a tax return, but i'm afraid they would come back with thousands and thousands of penalties / interest from years ago if they did.
 

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I'm not an expert, but....

I was overseas for a while and had HECS. The interest for HECS is almost nothing, so it's not going to be a $50,000 debt.

Australia is not like the U.S. They don't care what you earn overseas. ""Welcome back to Australia! I see you've paid off your HECS debt 100%, but you never did certify the overseas income that we use to calculate what percentage of your HECS debt you're supposed to paid each year! Please submit that now"" Their only concern is to recover the HECS.

Does you wife fill in a tax return. If so, then just pay the amount that I'm sure they are requesting. If not, then fill one out this year (before Oct 31) and pay what they request.
 
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