Defer HECS Repayment: Hardship Rules and Steps

You can apply to defer HECS repayment by asking the Australian Taxation Office to defer or amend a compulsory repayment on the grounds of serious hardship or other special reasons, using form NAT 2471. Deferral is not forgiveness: the amount is added back to your HELP debt, which keeps being indexed, and it is raised again later.

This guide explains who the Australian Taxation Office (ATO) may consider, what the form asks for, the time limits and what happens after you apply. It is general information only, not financial or legal advice, and this site is not affiliated with the ATO. Nothing here guarantees that an application will be approved.

Can you defer a HECS repayment?

Sometimes, yes. A compulsory repayment on a Higher Education Loan Program (HELP) debt, which includes HECS-HELP, is worked out through your income tax return. If paying it would cause serious hardship, or there are other special reasons that make deferral fair and reasonable, you can ask the ATO to defer it or to amend your assessment so the repayment is removed for that year. The ATO publishes the rules on its deferring repayments page.

The same process covers other study and training loans that carry a compulsory repayment, as well as the overseas levy. This article stays on the HECS-HELP and HELP situation. If you first want to know how large your repayment is, you can estimate it with our HECS repayment calculator before deciding whether an application is worth the effort.

Two points set expectations. First, the ATO assesses each application on the facts you give it, so there is no automatic entitlement. Second, a successful application changes when the money is collected, not whether the debt exists. Both points come back in the sections below.

Who qualifies: serious hardship and special reasons

The ATO recognises two grounds. You need to show that making the repayment has caused or would cause serious hardship, or that other special reasons make deferral fair and reasonable. The table sets them side by side using the ATO's own descriptions.

How the ATO looks at your assets

For serious hardship, the ATO says it does not generally expect you to sell your home, your motor vehicle or the tools of your trade to pay a repayment. Other assets are different. If you own a rental property, shares or other investments, the ATO may treat them as evidence that you have some capacity to pay. That is why the form asks about assets and liabilities as well as income and expenses.

What the ATO does not list

The special reasons examples above are the ones the ATO gives, and it presents them as examples only. If your circumstances are unusual, describe them in writing and explain why paying the repayment now would be unfair. The ATO decides each application on the facts you give it, so no situation is certain to qualify or certain to fail.

How to apply with form NAT 2471

The form is called "Defer or amend your compulsory repayment or overseas levy" and its number is NAT 2471. You download it from the ATO website. The steps below follow how the ATO describes the process; always check the current form and instructions before you lodge.

1. Decide which ground fits. Read the table above and choose serious hardship, special reasons or, where it applies, both.
2. Download NAT 2471. It is divided into sections. If you are claiming serious hardship you complete the income and expenditure section and the assets and liabilities section. If you are claiming special reasons only, you can skip ahead to the later section where you describe your circumstances.
3. Describe your situation in writing. Say what has happened, when, and how it affects your ability to meet the repayment. Attach supporting documents where you have them.
4. Lodge the form. The ATO accepts lodgment by post, fax or email. Take the lodgment details from the ATO page or the current form rather than from another website.
5. Keep a copy. Keep the lodged form and attachments with your tax records.

If you want to ask about a partial deferral, the ATO page gives 1300 650 225 as the number to call. For everything else the written application is the route.

Time limit, decisions and review

The deadline depends on where you are in the tax cycle, so the table separates the situations the ATO describes.

How long the ATO takes to decide

The ATO says it will tell you its decision in writing within 28 days of receiving your application. It does not promise an outcome, and this article cannot predict one.

How long a deferral lasts

If your application succeeds, the ATO may defer for any period it considers appropriate, but in most circumstances not for more than one year. Because the repayment is raised again in a later year, you may need to apply again if your situation continues. Treat each year as a separate application.

If the ATO says no

You have options. You can lodge a new application with new grounds or extra documents. You can also ask the ATO to review the decision in writing within 28 days after you receive notice of it, and the ATO says it will give you the outcome within 28 days of your request. If you are still unhappy, you may apply to the Administrative Review Tribunal within 28 days of the date on the review outcome letter.

Defer or amend: which word applies to you

The ATO uses two words for the same application, and which one fits depends on whether you have already lodged. If you have not yet lodged your tax return, you ask to defer, and the ATO says this can be for the current, previous or next income year only. If you already hold a notice of assessment that includes a compulsory repayment, you ask to amend that assessment, and the two-year window runs from the day the notice was issued. A notice of assessment can be an original, an amended assessment or an overseas levy notice, so check the issue date printed on the one you are relying on.

The age of the debt matters as well. For HELP compulsory repayments from 2005-06 onwards the timing rules above apply. A debt from 2004-05 or earlier (the HECS era) or a Financial Supplement debt can be the subject of a deferral application at any time. If you hold more than one kind of debt, read the ATO page for each rather than assuming one deadline covers all of them.

What deferral does not do

When a deferral is granted, the ATO amends your assessment, but the repayment is not waived. It is added back onto your accumulated HELP debt, and the ATO continues to index that debt. The repayment is then raised again in the next income year in which your repayment income is above the minimum threshold.

Indexation is the annual adjustment that links your balance to the Consumer Price Index. Indexation still lifts the balance each year, so a deferred amount does not stay the same size while it waits. Our own explainer on how compulsory HECS repayments work makes the same point that deferral is not a waiver.

Other help while you are struggling

If you cannot pay an income tax debt on time, the ATO says you may be able to arrange payment by instalments. That is a different process from a HELP deferral and does not change your HELP repayment.

A financial counsellor can help you work through your whole situation, not just the student debt. The National Debt Helpline offers free financial counselling, which can help you think through whether an ATO application makes sense for your situation.

A short checklist before you apply

• Work out your likely repayment so you know what you are asking the ATO to defer.
• Gather evidence of income, expenses, assets and liabilities if you are claiming serious hardship.
• Write a short, factual description of what has changed.
• Note the date on your notice of assessment so you can check the two-year window.
• Keep copies of everything you send.

When you are ready to check the numbers, the repayment calculator will show an estimate based on your income, which is the figure most people want to see before they fill in NAT 2471.

This article is general information, not financial, tax or legal advice. Figures are approximate and change over time — always verify with a qualified professional or the official source before making a decision.

Written and reviewed by the HECS Debt Calculator editorial team. Facts checked against primary sources; see the reference above.

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