HELP Indexation
Annual adjustment of HELP debt balances on 1 June, using the lower of CPI or Wage Price Index since 2023.
HELP indexation is the annual adjustment applied to outstanding HELP, VSL, and other student loan debts on 1 June each year. Since the legislative change effective from 1 June 2023, indexation is calculated using the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI). Previously, only CPI was used, which caused controversy in 2023 when CPI spiked to 7.1%, increasing some debts by thousands of dollars.
The change to the lower of CPI or WPI was applied retrospectively to the 1 June 2023 indexation, resulting in refunds or reductions for many borrowers. Going forward, this mechanism ensures that HELP debts cannot grow faster than wages, providing better protection against inflation shocks. For 2025, the indexation rate applied was approximately 3.2% (the lower of CPI and WPI at the time).
Importantly, voluntary repayments made before 1 June reduce the balance before indexation is applied, effectively saving you money. If you have a HELP debt and can afford to make a voluntary payment before 1 June, the indexation saving can be a guaranteed return — equivalent to the indexation rate on the amount you pay. However, there is no longer a bonus for voluntary repayments beyond this indexation timing benefit.
How it works
HELP indexation is the annual adjustment applied to your outstanding HELP, VSL, and other study loan balance every 1 June. Since the change effective from 1 June 2023, the rate used is whichever is lower of the Consumer Price Index or the Wage Price Index, replacing the old approach of using CPI alone.
You see the effect on your ATO online services balance around each 1 June, before that year's tax return is even lodged. The 2023 change to using the lower of the two measures was applied retrospectively to that year's indexation, after CPI had spiked to 7.1%, producing refunds or balance reductions for borrowers who'd already been indexed at the higher CPI rate.
Voluntary repayments made before 1 June reduce the balance that indexation gets calculated on, so paying early locks in a saving equal to that year's indexation rate applied to whatever you paid off — a genuine benefit, but the only one now available. The old voluntary repayment bonus that gave an extra 5% discount on top has been removed, and people sometimes still expect that bonus when it no longer exists.
Example: paying down debt before 1 June indexation
Someone has a $20,000 HELP balance in late May, and that year's indexation rate turns out to be around 3.2%, roughly the rate applied in 2025. If they make a $5,000 voluntary payment before 1 June, only the remaining $15,000 gets indexed, saving about $160 in indexation compared with making the same $5,000 payment the day after indexation applies to the full $20,000.
That $160 is the entire benefit of paying early — there's no additional bonus on top, since the old 5% voluntary repayment bonus scheme has been removed and only this indexation-timing saving remains.
Related Terms
HELP/HECS Debt
A government loan for tertiary education tuition fees, repaid through the tax system once your income exceeds the minimum threshold.
Repayment Income
The income measure used to calculate compulsory HELP/HECS repayments — taxable income plus other adjustments.
VSL (VET Student Loans)
Government loans for students undertaking eligible vocational education and training (VET) courses at diploma level and above.
Commonwealth Supported Place (CSP)
A university place where the government subsidises part of the tuition cost, with the student paying a reduced "student contribution".