The bill to change the annual indexation for study and training loans passed parliament.
Once the law is changed, 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%.
Most a study or training loan are currently being recrediting excess indexation amounts directly to the loan.
If your study or training loan 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 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 than others to show on their accounts depending on the complexity.
More information is available on the following link:
Study and training loans what's new | Australian Taxation Office
For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au.