1. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 1 Other Collection Schemes Chapter 8

2. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 2 HIGHER EDUCATION CONTRIBUTION SCHEME (HECS) Students undertaking prescribed higher education courses are required to contribute towards the cost of their education. The HECS monies received are used by the federal government to fund the cost of higher education. The HECS charges are set each year at standard rates for higher education by the Commonwealth government. Payments of HECS debts are not deductible for income tax purposes.

3. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 3 STUDENTS AFFECTED The HECS applies to students undertaking prescribed higher education courses across Australia. The HECS applies to full-time and part-time students. Most students, for example, enrolled for undergraduate degrees and diplomas at universities come under HECS.

4. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 4 EXEMPTIONS TAFE students. Fee-paying postgraduate students. Students in non-award courses. Students from overseas who pay full fees.

5. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 5 Assessment of HECS Charges There is a standard HECS charge for each year of enrolment in higher education. It is generally indexed upwards for each new year. The charge payable for full-time students is reduced proportionally for part-time students. Notices are issued after each census date, being 31 March for Semester 1 and 31 August for Semester 2. If a student fails subjects during the semester, he or she is still liable to pay any HECS charge assessed. Any application to cease study must be made before the census date in the semester.

6. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 6 HECS PAYMENT METHODS UP FRONT A significant discount of the HECS charge is given. DEFER Repay when income reaches a minimum level. Enrolling students must indicate to the educational institution how they intend to pay their HECS charge. Deferring payers pay their HECS debt through the income tax system. Voluntary payments, however, can be made at anytime.

7. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 7 COLLECTION OF HECS DEBTS The ATO will send a HECS information statement dated I June every year to relevant taxpayers who have a HECS debt. The statement shows the current balance of the HECS debt owed by the taxpayer. Taxpayers may repay their HECs debt through the PAYG system when their earnings reach a minimum level.

8. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 8 COLLECTION OF HECS DEBTS Employers are required to withhold the prescribed rate when the employees earnings reach a specified level. There are HECs withholding schedules provided by the ATO. HECs payments are credited against the taxpayer’s HECs debt.

9. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 9 CHILD SUPPORT SCHEME The Child Support Scheme operates through federal child support legislation. The aim of the legislation is to ensure that separated parents fairly share the financial support of their children. It is intended that the custodial parent (or other custodian) receives assistance from the non-custodial parent for the cost of financial support of their children.

10. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 10 ASSESSING THE AMOUNT TO BE PAID 1.PERSONAL AGREEMENT 2.CSA ASSESSMENT Apply to the CSA to make an assessment for child support. The CSA applies a formula. A CSA child support assessment can be altered later if circumstances change Court order. 3.COURT ORDER

11. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 11 COLLECTING CHILD SUPPORT SELF ADMINISTRATION PRIVATE COLLECTION CSA COLLECTION

12. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 12 EMPLOYERS' OBLIGATIONS Employers are required to inform the employee in writing how much child support was deducted. The amount deducted must be sent to the CSA by the seventh day of the month following the wages month. It is illegal for employers to discriminate against an employee because of his or her child support responsibilities. The CSA will officially notify employers of paying parents in writing.

13. Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Tax Procedures for your Business by Ian Birt, Slides prepared by Peter Miller 13 Discusses Payroll Tax CHAPTER 9