ATO Tax Credit Payment 2025: How to Claim the $1,200 and Check Your Eligibility

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The Australian Taxation Office (ATO) has introduced a $1,200 tax credit aimed at helping HECS-HELP debt holders and those who have recently repaid their student loans. This initiative will reduce student debt and slow the growth of loan indexation, offering significant relief to Australians burdened by student loans. If you’re eligible, check your myGov account to see if you qualify and ensure your bank details are updated to receive your refund.

What Is the $1,200 ATO Tax Credit?

The $1,200 tax credit is a one-off measure to reduce the growing burden of HECS-HELP debt. It was introduced after rising student loan balances due to yearly indexation caused significant financial strain. In 2023, the Consumer Price Index (CPI) caused a 7.1% increase in student loans, making the debt more challenging to manage. This new tax credit, along with a revised indexation system, aims to address this issue by providing financial relief and reducing future debt growth.

In addition, the revised indexation system will apply the lower of the CPI or the Wage Price Index (WPI), ensuring that student debt grows at a slower, more manageable rate.

Who Is Eligible for the $1,200 Tax Credit?

  1. Current HECS-HELP Debt Holders
    If you currently have a HECS-HELP debt, the ATO will automatically apply the credit to your outstanding balance. This means that your debt will be reduced without needing to take any action.
  2. Those Who Fully Repaid Their HECS-HELP Debt After June 1, 2023
    If you paid off your HECS-HELP debt in full after June 1, 2023, you may be eligible for a refund of up to $1,200. To claim this refund, you’ll need to confirm your eligibility with the ATO.

How to Claim the $1,200 ATO Tax Credit

Step 1: Check Your Eligibility

Determine whether you are eligible by answering these questions:

  • Do you currently have a HECS-HELP debt?
  • Did you fully repay your HECS-HELP debt after June 1, 2023?

If you answered yes to either, you may be entitled to the tax credit.

Step 2: Log into ATO Online Services

Visit your myGov account and log into ATO Online Services. Here, you can verify if the credit has been applied to your debt or if you’re eligible for a refund.

Step 3: Update Your Bank Details

Ensure your bank details are up to date in the ATO system if you’re eligible for a refund. The ATO will deposit the credit directly into your nominated account.

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