Speaker 1: Already and this this is the Daily This is the
Speaker 1: Daily OS.
Speaker 2: Oh, now it makes sense.
Speaker 1: Good morning and welcome to the Daily OS. It's Friday,
Speaker 1: the first of August. I'm Harry Seculch, I'm Billiefit Simon's.
Speaker 1: Your HEX balance is about to go down by twenty percent.
Speaker 1: In Parliament yesterday the government passed its bill to reduce
Speaker 1: all student debts. So when will this actually apply to
Speaker 1: your HEX account? And what if you already paid off
Speaker 1: your HEX debt. We asked what you wanted to know
Speaker 1: about this new development, and today we're here to answer
Speaker 1: all your questions.
Speaker 2: We'll get to those questions in a moment, but first,
Speaker 2: here is a quick message from today's sponsor. Okay, Harry,
Speaker 2: So we are talking about the Hex's discount. Now, this
Speaker 2: is one of the key promises from the Labor government
Speaker 2: at the last election and it has now gone through Parliament.
Speaker 2: For anyone who miss this, do you want to just
Speaker 2: explain what exactly it is, because my understanding is this
Speaker 2: is just a one off discount. It's not a long
Speaker 2: term overall reduction on the price of Uni degrees.
Speaker 1: Yeah, that's right, Billy. So it's the reduction in the
Speaker 1: value of a debt. It doesn't necessarily translate to anything
Speaker 1: beyond that. So the price of a UNI degree, the
Speaker 1: price of a tape course or private college, that's not
Speaker 1: changing necessarily. But what this does apply to is the
Speaker 1: value of a debt balance at a particular time. And
Speaker 1: as far as we know, there's no plans to discount
Speaker 1: future debts. If you don't already have one, or if
Speaker 1: you paid off a debt last year, that this doesn't
Speaker 1: necessarily apply to you. So I suppose it's important to
Speaker 1: put those guardrails in place. That this is a one
Speaker 1: off twenty percent discount on a debt balance on the
Speaker 1: first of June twenty twenty five.
Speaker 2: So just to be clear there, this apply to the
Speaker 2: dollar figure that was attached to your hex debt as
Speaker 2: of the first of June this year.
Speaker 1: That's right just before the indexation kicked in. Got it.
Speaker 1: So that's when the value of your debt goes up
Speaker 1: to slightly and it's based on one of two measurements.
Speaker 1: It's either the wage price index or the consumer price index.
Speaker 1: Without going too deep into what that means, it's just
Speaker 1: basically increasing in line with the value of money over time. Yes,
Speaker 1: got it? Okay?
Speaker 2: So let's go to the questions that we got from
Speaker 2: the audience yesterday. The first one we got was does
Speaker 2: it apply to private unis and all degrees?
Speaker 1: Yeah, effectively, it does, because the federal government oversees and
Speaker 1: administers all things relating to student debts at a higher
Speaker 1: education level. So when you want to start studying at
Speaker 1: an accredited institution, so at universities or private colleges, you
Speaker 1: can get what's known as a higher education loan program
Speaker 1: or help. And it doesn't really matter which institution and
Speaker 1: you get this hex debt or help debt from. It'll
Speaker 1: all be processed in the exact same way when it
Speaker 1: comes to this discount. So, like I said, this is
Speaker 1: a discount on the value of a debt. That debt
Speaker 1: is pretty much the same across the board in the
Speaker 1: sense that it all comes from the same place, which
Speaker 1: is the federal government. So it will apply to you
Speaker 1: if you have a help debt sitting there.
Speaker 2: I'm one of those people who always gets confused between
Speaker 2: help debt and hex debt, But for the purposes of
Speaker 2: this conversation, it really doesn't matter. It literally just applies
Speaker 2: to all student debts.
Speaker 1: Student debt. I think that's like the more I guess
Speaker 1: inclusive term, but I mean I always just tend to
Speaker 1: say hext I think everyone.
Speaker 2: Yeah, okay, next question that we got, what happens if
Speaker 2: I have already lodged my tax return and paid off
Speaker 2: my hex will I be refunded? And just another one
Speaker 2: that kind of relates to that, someone asked if I
Speaker 2: pay mine off in full, now will I get a
Speaker 2: twenty percent refund when it comes in?
Speaker 1: So these two questions kind of touch on the same thing,
Speaker 1: which is how far back does the discount apply? And
Speaker 1: I will go back to that date of the first
Speaker 1: of June, because that's the all important date for this
Speaker 1: hex stet discount. If you want to pay off your
Speaker 1: full debt, make some further voluntary repayments in the next
Speaker 1: few months, but you haven't seen that hex discount come
Speaker 1: into place, that doesn't matter. And this is why it's
Speaker 1: a little bit technical, So I might just walk you
Speaker 1: through some of these stages. The way it will work
Speaker 1: is if you had a hextet on the first of June,
Speaker 1: but you've since paid it off you plan to pay
Speaker 1: it off before the discount, you'll get a credit to
Speaker 1: what's known as your help account. And then if you've
Speaker 1: got no further debts to the tax office, then that
Speaker 1: will be processed to you as a refund. Right. So
Speaker 1: the government's official advice is, don't wait if you want
Speaker 1: to pay off your full debt, if you've made some
Speaker 1: voluntary repayments. If you you had a debt at the
Speaker 1: first of June, then you will be compensated in one
Speaker 1: way or another, and the actual discount amount only applies
Speaker 1: to that particular date. You will see it flow through
Speaker 1: to you in some form. Got it.
Speaker 2: But let's say that if you paid off your hex
Speaker 2: deet in full, let's say at the start of this year,
Speaker 2: then unfortunately this doesn't apply to you because you didn't
Speaker 2: have a debt as of the first of June this year.
Speaker 1: That's right, So it doesn't backdate beyond the first of June,
Speaker 1: got it. And it also doesn't apply to any future debts.
Speaker 1: Like I said, there's no plans, at least that we
Speaker 1: know about, for the government to make unied degrees cheaper
Speaker 1: or to discount the value of debts over time. It's
Speaker 1: just this one particular date.
Speaker 2: Yeap, All right, Next question, which I think is the
Speaker 2: number one question that we got from our audio.
Speaker 1: Can I take a bit of a guess, Yeah, what
Speaker 1: it is? When will the hex sebt discount actually take place?
Speaker 2: I think that is the question we got maybe thousands
Speaker 2: of times yesterday understandably, and so that is when will
Speaker 2: we actually see this in our hex debt accounts?
Speaker 1: Yeah, so I needed a bit of help in answering
Speaker 1: this as well, because based on some of the messages
Speaker 1: that the government was putting out there, they were saying
Speaker 1: that it will take a little bit of time once
Speaker 1: the legislation becomes law, which it has now, well it
Speaker 1: needs role as sent from the Governor General, but that's
Speaker 1: just a very form procee drill thing, tick of the
Speaker 1: box thing that will happen. But basically what happens now
Speaker 1: is that the Australian Tax Office also known as the ATO,
Speaker 1: they will be the ones processing this hex debt and
Speaker 1: that will apply automatically to hundreds thousands of different accounts.
Speaker 1: The government has said that it can take a bit
Speaker 1: of time based on people's individual circumstances. It's a little
Speaker 1: bit case by case. The twenty percent might seem like
Speaker 1: a really straightforward formula, but it actually does take a
Speaker 1: little bit of working out because of the smaller factors
Speaker 1: like the indexation value that was applied, So it can
Speaker 1: just take a little bit of time. That I asked
Speaker 1: the Prime Minister st when people can actually expect to
Speaker 1: see the value of their student debts reduced. And here's
Speaker 1: a bit of what he had to say.
Speaker 2: Most people should see the benefit by the end of
Speaker 2: the year, and it will be backdated importantly to the
Speaker 2: first of June.
Speaker 1: So I can't say with absolute confidence that overnight on
Speaker 1: this particular date you are going to see your HEX
Speaker 1: debt reduced. But in the Prime Minister's words, it should
Speaker 1: be done by twenty twenty six.
Speaker 2: Got it, So it will happen by the end of
Speaker 2: this year. Now, the other thing that has changed as
Speaker 2: part of this bill, which I think has got a
Speaker 2: little bit less airtime but is still important, is the
Speaker 2: change to the minimum repayment threshold. Now, this is the
Speaker 2: minimum salary you need to have in order to start
Speaker 2: paying off your HEX debt. What is the change there.
Speaker 1: The way that HEX was conceived as an idea when
Speaker 1: it first came into being was you you start paying
Speaker 1: off this debt once you can afford to. So in
Speaker 1: that way, it doesn't really work like other debts, where
Speaker 1: say you take out a loan from the bank, you
Speaker 1: have to start paying it off despite your circumstances that
Speaker 1: you are indebted to the bank, so you have to
Speaker 1: start giving them some money. The way that hex stets
Speaker 1: work is that you need to earn a minimum amount
Speaker 1: before you start paying it off, and the more you earn,
Speaker 1: the more you pay off. Right now, the minimum repayment
Speaker 1: threshold is fifty six, one hundred and fifty six dollars,
Speaker 1: and that minimum threshold is now going to increase to
Speaker 1: sixty seven thousand dollars. And that's all under the same
Speaker 1: piece of legislation that we saw the hex debt discount
Speaker 1: fall under as well, which is just about to become law.
Speaker 1: And what this means is that over the next year
Speaker 1: or so, if you are earning, say between seventy and
Speaker 1: eighty thousand dollars, you'll actually find that over time you're
Speaker 1: paying off a little bit less than you were last
Speaker 1: year because the minimum payment threshold has increased. And basically
Speaker 1: there's a pay as you go system, so there's a
Speaker 1: bit that's withheld from your pay each week, and then
Speaker 1: that all sort of comes together at the end at
Speaker 1: tax time. So July next year, and since the payment
Speaker 1: threshold is higher, you don't end up paying as much.
Speaker 1: Does that make sense?
Speaker 2: That makes sense. So what you're saying is that with
Speaker 2: the minimum repayment threshold changing, so too does all of
Speaker 2: the thresholds change.
Speaker 1: They're all scaling up, if you're so, it's going from
Speaker 1: people at fifty six thousand dollars and above paying it
Speaker 1: off to sixty seven thousand and above paying off. And
Speaker 1: like I said, the more you earn, so if you
Speaker 1: get up to one hundred, one hundred and fifty thousand dollars,
Speaker 1: you end up having more pay with held from your
Speaker 1: pay slip. And then people who are on slightly lower
Speaker 1: incomes but just meeting that threshold won't pay as much
Speaker 1: over the next financial year.
Speaker 2: Got it, Harry. I think that's all of the questions
Speaker 2: that we've got. Thank you so much for taking us through.
Speaker 1: That, No problem, Billy, there were some great questions.
Speaker 2: And thank you so much for listening to this episode
Speaker 2: of the Daily OS. We'll be back this afternoon with
Speaker 2: your evening headlines, but until then, have a great Friday.
Speaker 1: My name is Lily Maddon and I'm a proud Arunda
Speaker 1: Bungelung Kalkutin woman from Gadighl country. The Daily oz acknowledges
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