Latest news with #indexation
News.com.au
29-07-2025
- Business
- News.com.au
‘Monster amount': 29-year-old Aussie reveals problem with HECS debt
A young Australian woman has claimed that indexation 'is the same as interest' after expressing her annoyance that she still has a 'monster' HECS-HELP debt. Sarah Jane, 29, works a corporate job in Sydney, lives on The Central Coast, and creates social media content on the side. At the moment, she has been exploring sharing financial content with her followers. She recently created a TikTok video revealing how she spent $1600 during a particularly expensive week, with that clip amassing over 100,000 views. Speaking to Ms Jane said she started creating money content because she enjoys watching it herself. There is also a still fair amount of mystery around how other people spend their money, but whenever she speaks with her friends, everyone expresses feeling poor and wonders how other people their age are budgeting. 'We've never made more money and never been poorer,' she said. In Ms Jane's case, while she declined to get into the specifics surrounding her income, she said her HECS-HELP debt, which is currently around $30,000, is something that plagues her. 'I'm the most risk adverse person financially. I don't have a credit card, or a car loan and I don't have any personal debt,' she said. 'HECS was sold to us as teenagers as this interest free loan but indexation is the same as interest.' Higher education loans in Australia don't charge interest, but they are subject to indexation based on inflation. In 2023, millions of Australians saw their loans increase by a whopping 7.1 per cent — the biggest jump seen in 30 years. In June 2024, the indexation rate was 4.7 per cent. HECS-HELP loans are now indexed in line with either the Consumer Price Index (CPI) or the Wage Price Index (WPI), depending on which figure is smaller, with this change backdated to June 1, 2023. On June 1, 2025, a 3.2 per cent indexation was applied to all student loan debts. However, last week, the Labor government introduced a bill to parliament. If passed, it will see student loan debts slashed by 20 per cent for approximately three million graduates. Ms Jane was 24 when she completed her bachelor's degree majoring in media. It took her longer than average to finish because she paused her degree to travel. She's now shocked that, even with five years of full-time work under her belt, she is still paying it off. 'I thought my HECS was not going to be a concern in my life. I'll get a bachelor's degree and I'll work in my industry and pay it off,' she explained. 'It is still $30,000 or something.' Living with that debt hanging over her head means it is a 'bigger piece' of her life than she would like. 'I'm paying off a monster amount of HECS debt,' she said. The 29-year-old said the cost of living crisis has made her notice things like her student debt. 'As someone that gets paid monthly, it feels like it evaporates. The cost of everything has gone up dramatically,' she said. 'I commute from The Central Coast to Sydney and it is $20 just on transport. I bring my lunch and breakfast to work every single day and it still adds up to $40 a day between transport and buying yourself one or two coffees.' Ms Jane said she feels like it is so easy to spend more than you want to as it 'snowballs' and everything costs so much money these days. The young worker claimed that she's a complete type-A personality, with a spreadsheet where she tracks her ingoings and outgoings. However, being diligent often isn't enough. For instance, Ms Jane was 'massively shocked' when she spent $1600 in a single week, as she often only spends $350 a week. The $1600 spend was also a week where she had a few social occasions collide, including her best friend's birthday. 'It was the perfect storm and a one-off week,' she said. What she's most proud of, though, is that she has a firm understanding of her finances, even if she's sometimes stunned by the cost of living. 'I used to find finance really intimidating, I found it really scary and it used to make me massively anxious,' she said. 'The more you understand it the less confronting it is.'
Daily Mail
11-06-2025
- Business
- Daily Mail
Services Australia: Millions of Aussies on social services payments set for cash boost
Millions of Aussies receiving social services payments are set to pocket more money. From July 1, Services Australia payments will be indexed (adjusted in line with inflation) by 2.4 per cent. Paid Parental Leave, Family Tax Benefit A and B, the Newborn Supplement, and Multiple Birth Allowance will all receive a modest increase, affecting about 2.4million Australians. For example, a family receiving Family Tax Benefit A will pocket an extra $5 a fortnight. Parents with triplets will receive an extra $120 a year, while first-time parents of a newborn child will pocket an additional $48 over 13 weeks. Minister for Social Services Tanya Plibersek described indexation as a 'crucial way to help families when cost of living rises'. 'Millions of recipients of social security payments will see more money in their bank account,' Plibersek said. However, asset limits and income thresholds will also increase by 2.4 per cent. That means some Aussies will become ineligible for JobSeeker Payment, Youth Allowance, Austudy, ABSTUDY Living Allowance, Parenting Payment, Special Benefit and Parenting Payment Single. The July indexation will not impact youth and student payments, which are indexed each year in January.
Yahoo
26-05-2025
- Business
- Yahoo
$882 HECS hit arrives for millions of Aussies this week
Three million Australians with student loan debt will see their balances automatically increase this week when the government's yearly indexation is applied. HECS-HELP loans get indexed every year on June 1, and this will still apply despite plans to cut debts by 20 per cent. Unpaid HECS-HELP loans will increase by 3.2 per cent on Sunday, the Australian Taxation Office (ATO) has confirmed. For the average $27,600 debt, this will add about $882 to their loan. The federal government is planning to cut 20 per cent off all student loan debts that exist on June 1, before indexation is applied. This has not yet been legislated, but Prime Minister Anthony Albanese said it would be the 'first piece of legislation' introduced into the new parliament following the election. RELATED Tax cuts, HECS debts, Medicare boost: All the major cost-of-living relief coming for millions of Aussies $3 million superannuation tax change sparks property warning as 'panic' selling begins Most in-demand tradie jobs paying nearly $3,200 per week amid crisis: 'Shining a light' The move would wipe $16 billion in debt across HELP, VET Student Loan, Australian Apprenticeship Support Loan and other income-contingent student support loans. For someone with the average $27,600 debt, they would see around $5,520 wiped from their outstanding loans. The government also plans to increase minimum income thresholds from $54,000 to $67,000 from July would mean someone earning $60,000 would pay around $1,300 less per year in repayments. Last financial year, HECS debt increased by 4 per cent following changes to the way indexation is calculated. Indexation is now capped at whichever is lowest of the Consumer Price Index (CPI) or Wage Price Index (WPI). This was backdated to June 1, 2023, lowering last year's 4.7 per cent rise to 4 per cent and the previous year's 7.1 per cent hike to 3.2 per cent. This will ultimately depend on your individual financial situation. The government said it's worth taking into account the upcoming 20 per cent HECS debt reduction when making your decision. The reduction will only apply to debt balances as at June 1, so if you make a repayment beforehand, you will ultimately get a smaller reduction. 'It may make sense to wait until after the 20 per cent reduction is applied,' the government said. 'Making a voluntary repayment after 1 June 2025 will maximise the impact of your repayment and result in a greater reduction in your HELP debt.' Financial adviser Helen Baker previously told Yahoo Finance it was important to consider your short- and long-term goals before paying off your HECS debt, including any plans to buy property or start a family. 'What tax bracket are you in? What commitments are you looking forward to? What things might change in your lifestyle going forward in the next few years? Look at all that together to work out whether it makes sense and how much makes sense,' she said.
