Thousands of Aussies are receiving mystery ATO deposits. Here's why

Thousands of people received unexpected deposits from the Australian Taxation Office (ATO) this week as part of rolling refunds from the federal government's 20 per cent student loan debt reduction.

The mystery payments were refunds for people who paid off their student loans last year before the reduction was applied, according to online tax agency Etax.com.au.

Here's everything you need to know.

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Why am I being refunded?

All outstanding student loan debts, including HECS-HELP, FEE-HELP, VET Student Loans and Australian Apprenticeship Support Loans, as of June 1 were slashed by 20 per cent.

It removed more than $16 billion of debt for more than three million Australians, which the federal government touted as the "biggest cut in student debt ever".

But the ATO did not apply the discount until late last year.

Australians started receiving the discount from late November to December.

Etax explained this meant that taxpayers who lodged their return before the discount was applied made compulsory payments against an unadjusted debt balance.

The ATO has now recalculated their accounts and is returning the money owed to them.

Etax's Ashley Debenham said hundreds of his clients were impacted by this and eagerly waiting for their refund over the past few months.

"It's great to see they've finally done this for most people," he said.

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How do the refunds work?

People who have been affected will receive a refund as a credit in one of two ways, according to Etax.

For those who paid off their HELP debt, the ATO will transfer the credit as a bank deposit, as they do with tax returns.

And for those who still have an outstanding HELP debt, the ATO will apply the credit to the debt balance to lower the amount owed.

The ATO said it has issued refunds to the majority of the people affected as of today.

"A small number of students whose account is more complex and requires manual action to ensure the correct outcome will receive their refunds in February or March 2026," an ATO spokesperson said.

The ATO urged anyone who believes they are eligible and have not received their refund to reach out.

"If students believe they are entitled to a refund but have not yet received it, they should check their MyGov account and ATO Online account to check the status, then contact the ATO if more information is required," an ATO spokesperson said.

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