Towards the end of any financial year I have a message for anyone with a HECS debt that is going to be obliterated when they put their  tax return in. This is a recurring piece of advice that I drag out at the end of each financial year.

If you have a HECS debt and you have advised your employer of this fact then during the past year you have had extra money deducted from your pay by the paymaster.

This does NOT mean that you have been “paying” your HECS debt.

Your HECS debt will be paid, either fully or partially, when your income tax return is assessed. If it will be fully paid from your tax refund this year then I strongly recommend that you pay it off in a lump sum before you lodge your tax return. Even if you have to borrow the money to do so your tax refund will more than cover the balance and you will have a substantial discount left to spend.

Make sure you get the arithmetic right. This advice only applies to those who are in a position that they will have no HECS debt after the year’s tax return is lodged. If your employer has not been taxing at the correct level then instead of getting a tax refund bigger than your HECS debt you may very well finish out of pocket.

If your employer has not been taxing at the right rate you will finish out of pocket anyway!