The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Repayment of the financial supplement - before the contract ends

Note: No new financial supplement loans are available from 1 January 2004.

For existing loans, a person's loan repayment arrangements will continue unchanged. Remaining loans will be collected via the taxation system.

The following SFSS guideline references remain for historical purposes.

Summary - early repayment is voluntary

A student can voluntarily repay their financial supplement at any time after they begin receiving financial supplement payments. However, the student does NOT have to commence repaying the financial supplement until:

  • after the end of the contract period, AND
  • their income reaches average weekly earnings.

These early repayments must be made DIRECTLY to any branch of Australia Post or Centrelink.

Discount for early repayments

Any optional repayments of financial supplement made within the first 5 years of taking out a supplement loan are given an increased value as shown in the following table.

If the student makes a repayment that is … then the formula to calculate the discount is …
85% or less than the amount outstanding ((amount repaid × 100) divided by 85) minus the amount repaid.
greater than 85% but less than the total amount outstanding ((amount outstanding × 115) divided by 100) minus amount outstanding.
equal to the amount outstanding ((amount repaid × 115) divided by 100) minus the amount repaid.

How the discount is applied

Early repayment discount amounts are used to reduce amounts owed to the Commonwealth to:

  • reduce the result of CPI increases, and
  • repay the principal when the CPI amount has been reduced to zero.

If the student had a financial supplement in more than one year, they can choose which supplement a repayment is credited against.

Act reference: SSAct Chapter 2B Student Financial Supplement Scheme

Policy reference: SS Guide Repayment of the financial supplement - after the contract ends

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