Can a future debt accure interest retrospectively?

bingoes — Sun, 12 Oct 2008 16:58:23 -0800

I did my Australian taxes late. I'm now being charged a general interest charge on a $7.5k Higher Education Debt that didn't exist at the time. Is there anything I can do? So my life fell apart for a few years (living arrangements, relationships, work, health - everything was a disaster). As a result I wasn't able to get it together enough to do my taxes (from 2003/2004 till April this year). At the time I quit my job and went back to study.
Fast forward to now, I'm back on top of things so went back and submitted the 4 outstanding returns. Yay for me! I thought.
My HELP (Higher Education Loan Programme) debt in 2004 was about $200. In 2005 it was about $1.8k. Today it's $7.5k. But when the ATO went through my tax return for the 2005 year, they applied the current HELP debt of $7.5k to that year, and slapped on a hefty general interest charge (around $3.8K). So all up my current liability to the tax office is $12 000, even though I've been a low income earner and student for all but one of these outstanding years.
It seems outrageous and unfair that a debt that accrued in the future, can be applied to the past, and that interest can then accrue on that debt.
I've been to 2 accountants already. The first said "sure it's a bit mean, but the ato calculations are correct (HELP is not matched by year) and it will probably cost you more to have us fight this than to just pay it".
The second said "you might be able to get out of the general interest charge, but only if you can prove you didn't submit your returns as a result of a natural disaster, medical reasons (supported by GP) or inability to access records".
Over those years I moved house a couple of times, went to various doctors many times, and saw a few counselors. But to chase up certificates/proof for all those little pieces of evidence seems unbearable. And I'm not sure that it will even stack up as a reasonable excuse.
Please help me hive mind - do I have any other options?

How can I start getting square with my HECS debt?

Anonymous — Fri, 19 Sep 2008 17:05:06 -0800

Hey, Australians who have dealt with (or are) HECS bureaucrats! How can I start getting square with my HECS debt? I went to university in Australia in the 90s, receiving some money from the HECS scheme. I worked for a few years in Australia but without reaching the minimum wage requirement to pay back HECS. Then I left the country and got a job that does meet the requirement... but since I don't pay any Australian taxes, no HECS. Now I'm building up to the house-and-family thing and want to deal with this thing once and for all.

What I want to be able to do is:
1) Contact HECS and find out how much money I owe
2) Work out a payment plan that's as convenient for me as possible (for ex, taking advantage of 'If you pay more than $1000 at once' bonuses, if they have them.)

But I am afraid to take step 1 until I know how they're going to react. If they're just going to want to persuade me to pay them back, and offer me incentives to do so, great. If they're going to be threatening me and making demands, I want to be prepared to respond.

BTW, I am definitely looking for closure here. I won't ever live in Australia again but since who knows what will happen in the future (for ex: my government and Australian government reach an agreement about wage-garnishing in 2050, I get hit with 60 years of compound interest just before retirement)... I want to get to a situation where the Aus. government and I both agree that we are 100% square, end of story.

I am however open to fancy tricks that achieve this goal, legally, but minimizing the amount I pay back.

Throwaway gmail: hecs.question@gmail.com. Thanks in advance for your advice.

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Can a future debt accure interest retrospectively?

How can I start getting square with my HECS debt?