Young Australians Can Access Tax-Free Student Start-up Loan with Conditions
Young Australians undertaking study can now apply for a tax-free $1321 cash boost, although there are important conditions to consider.
Centrelink has opened the January to June application window for the Student Start-up Loan, which provides eligible students with a $1321 cash payment to assist with study supplies, travel expenses, and living costs.
However, it is important to note that this is a loan rather than a grant, meaning students are required to repay the amount over time.
The loan is also indexed, which implies that the original sum of $1321 could increase based on adjustments to the cost of living.
"You'll need to pay back the amount you borrow plus indexation," Services Australia states.
"Over time this can add up to a significant amount. You should consider how this will affect you in the long term before applying for one."
In 2024, the indexation rate was set at 4 per cent, while in 2023 it was 3.2 per cent.
Students will repay the loan through their tax returns.
"You must begin making repayments through your tax return once your income reaches a specific threshold," Services Australia explained.
"Additionally, you have the option to make extra voluntary repayments to settle your loan earlier."
"When you make a compulsory payment to the ATO via your tax return, you will pay a percentage of your income, and this rate varies depending on your total income."
Students can apply for the loan biannually for two loan periods: from January 1 to June 30 and from July 1 to December 31.
This payment operates alongside other support payments such as Youth Allowance and Austudy.
