One of the biggest responsibilities of being a business owner is looking after your employees. Whilst it may come as second nature to stay on top of major changes that effect the business directly, it is important to also be aware of changes that may be affecting your team members. One such change that could have a significant impact on some of or all of your employees is the upcoming changes to HELP fee repayments.
The Federal Government announced a number of changes to the HELP Fees that are charged to Australian university graduates. The changes essentially mean that students will be required to pay back their student debts sooner and in larger amounts once they begin working full-time.
The key changes are:*
- Fees for university courses will rise by 1.8% each year from 2018 to 2021, culminating in an overall 7.5% increase.
- The maximum fee for a four-year course will be $50,000. A six-year medical degree will be capped at $75,000. Government modelling suggests this will add between $700 and $3,900 to the cost of a typical university course.
- Students will end up paying 46% of the cost of their degrees, up from the current 42%. Government funding will drop from 58% to 54%.
- From July 1, 2018, the threshold income at which HELP fee repayments commence will drop to $42,000 (It is currently $55,000). The new number is even lower than a previous proposal to drop the threshold to $52,000. The $42,000 figure is 20% above the minimum wage.
- At the lowest level, students will have to pay 1% of income towards HELP debts. For high income earners, the maximum repayment will be lifted from 8% to 10%.
- From July 2019, the threshold for paying off HELP debt will be indexed to CPI, rather than to average weekly earnings.
During periods of change, it is important to regularly communicate with your employees. At wattsnext we have weekly one-on-ones to discuss any issues that may be affecting us, whether it be work related or not. Both managers and employees are able to use this time to highlight any changes that may be occurring and any anticipated effects. As a manager, it is important to use this time as an opportunity to discuss possible ways the business may be able to provide support.
While businesses may not be able to prevent the negative effects of an external change, keeping abreast of changes and how your employees are feeling will help you to provide your employees with the support that they need.