Individuals With Study & Training Loans May Receive Credits

The bill to change the annual indexation for study and training loans has now passed parliament. Once the change is law, indexation will be based on either the Consumer Price Index (CPI) or Wage Price Index (WPI) – whichever is lower. This change is backdated, taking effect from 1 June 2023.

The new indexation rates for the two previous years are:

>       3.2% for 1 June 2023 - reduced from 7.1%

>       4% for 1 June 2024 - reduced from 4.7%

The ATO is currently recrediting excess indexation amounts directly to the affected loans.

If you have a study or training loan that is affected, and your account is in credit after the adjustment, this credit will be transferred to your Income Tax account. It will then be applied against other primary tax or Commonwealth debts, (if applicable), and any remaining amount will be refunded to your nominated bank account. Most people will see these credits on their accounts by the end of January 2025. Some credits will take a bit longer to process than others, depending on the complexity.

We encourage you to check that your financial institution account details are up to date. This can be done by logging into your MyGov account, or by contacting our office, and we’d be happy to assist in checking this on your behalf. This will ensure the ATO have everything required to process the refund as efficiently as possible.   

If you have any questions in relation to the matters discussed in this blog, please get in touch with us.