What is a financial supplement debt?


A financial supplement is provided by the Australian Government and assists eligible individuals with debt solutions. Typically, aid is provided to students, new business owners, job seekers, and apprentices to help them through financial difficulty, and is only paid back once they reach a certain income threshold. 

If you’ve taken out a financial supplement and are curious about your debt repayments, or you’re going to apply for financial aid, you’ve come to the right place. In this article, we’ll cover everything you need to know about financial supplement debt. 

Let’s get to the following commonly asked questions: 

  • What is Financial Supplement Debt in Australia?
  • What is the student financial supplement scheme SFSS?
  • Is HECS a financial supplement?
  • Is HELP the same as HECS?
  • How do I know if I'm paying my HECS debt?
  • Is youth allowance a financial supplement debt?
  • What is accumulated financial supplement debt?

Q1. What is financial supplement debt in Australia?

Back in 2003, the Australian Government offered financial supplement loans to those in financial hardship or people who wanted to pursue goals in business and education. While the Social Security Office closed the program, those that accumulated financial supplement debt are still required to pay it back and stay updated with the compulsory repayment plan. 

The scheme was aimed at people who: 

  • Needed capital for their business
  • A tertiary student who needed financial support
  • Those with a low-income threshold 

Q2. What is the student financial supplement scheme SFSS?

In July 1988, the Australian Government introduced the SFSS (the student financial supplement scheme) to help tertiary students whose parents fell below a certain income threshold. Designed to offer more financial support to help eligible students cover their expenses, the SFSS allowed students to trade part of their youth allowance (YA) for twice the amount given in the form of a loan. 

The Student Financial Supplement Scheme (SFSS) ended in January 2004, however, ex-students are still required to repay the SFSS debt. Students could make voluntary repayment to the Commonwealth Bank of Australia for the first five years of the loan repayment contract. Now, the Australian taxation offices take back loan debts through taxes. 

Note: Students were only required to repay their loans after their income reached a certain level.

Q3. Is HECS a financial supplement?

The Higher Education Contribution Scheme is an education loan program designed to help tertiary students cover part of their student contributions. Once the student has graduated and receives a certain income, the outstanding loan is paid through the tax system. HECS is a financial supplement specifically designed to ease the strain of student debt.

Q4. Is HELP the same as HECS?

In 2003, the Australian Government significantly changed the higher education loan schemes by introducing the Higher Education Loan Program (HELP). This absorbed HECS, and the scheme is now named HECS-HELP. 

There are four types of financial help students can apply for under HECS-HELP. These include: 

  • Student contributions (HECS-HELP)
  • Tuition fees (FEE-HELP)
  • Overseas study expenses (OS-HELP)
  • Student service and amenities fees (SA-HELP)

Q5. How do I know if I'm paying my HECS debt?

You can find out if you’re paying back your HECS-HELP debt repayment or how much you owe, by visiting the Australian Tax Office through your online myGOV account or by contacting them directly. 

On your myGOV account, you’ll be able to find information about your tuition fees, including your indexation amounts and the voluntary loan repayments, as well as compulsory ones. 

Important: You’ll know if you’re paying back your HECS debt if your income is above the minimum threshold, and repayments will be included in your notice of assessment. 

Q6. Is youth allowance a financial supplement debt?

Youth allowance is a type of income support payment offered to Australians between the ages of 16 and 24. It is available to students, apprentices, and job seekers. Youth allowance does not class as a financial supplement debt as you don’t need to pay it back in the future. 

You can apply for Youth Allowance if you’re: 

  • 16 to 21 years old and seeking full-time work
  • 18 to 24 years old and studying full-time
  • 16 to 24 years old and enrolled on a full-time Apprenticeship
  • 16 to 17 years old and need to move away from home to study
  • 16 to 17 years old and studying full time. You must’ve completed year 12.

Q7. What is accumulated financial supplement debt?

If you have an outstanding government scheme loan, it becomes accumulated financial supplement debts that you will need to pay back depending on the terms of the financial supplement schemes. 

Note: To understand when you must repay your loan, we recommend researching your repayment thresholds and rates for your specific financial supplement. 

Summing up

The Australian Government is constantly assessing and offering new financial supplements to eligible citizens to help them achieve their dreams - whether it’s starting a new business, finding their dream job, or enrolling in University.

While most financial supplements do need to be paid back eventually, this is only required once the individual has reached a certain income threshold. The Australian Taxation Office will take the repayment amount from taxation, so there’s no need to worry about paying back your financial supplement debt manually.

If you liked this article, stay updated with the WeMoney blog for more financial advice. Or, read our article on ‘how to set up a personal finance plan’.

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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.

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