Other technical amendments

2007 technical amendments to the Student Loans Act on refunds of over payments, advising absence from NZ, overseas employment exemptions and more.

Refunds of over-payments when assessments are reopened

Section 58A of the Student Loan Scheme Act 1992

Section 58A(1) ensures that if a borrower's repayment obligation is reduced upon reassessment by the Commissioner, he or she can claim a refund of the difference in the assessed repayment obligations. The borrower has six months from being notified by the Commissioner of the difference in the assessed repayment obligations to claim a refund. The changes apply to any tax year.

Advising of absence from new Zealand

Section 37 of the Student Loan Scheme Act 1992

Section 37 specifies that a borrower must inform the Commissioner if he or she expects to be, or has been, overseas for more than six months (previously this was three months). The change applied from 1 April 2007.

Overseas employment exemption

Section 38AH of the Student Loan Scheme Act 1992

The words "derived from New Zealand" have been inserted into section 38AH(c)(i) to ensure that borrowers entitled to a full interest write-off on the basis that they are overseas for more than six months because of the nature of their employment must have salary or wages that are derived from New Zealand. The change applied from 28 March 2007, except for borrowers who applied to the Commissioner for a full interest write-off before the amendment came into effect. For these borrowers, the change comes into force on 1 April 2008.

Interest-free student loans for new borrowers

Section 38AL of the Student Loan Scheme Act 1992

Section 38AL gives the Commissioner the discretion to grant new borrowers a full interest write-off for up to 183 days from the date they first become a borrower. The changes make it possible for new borrowers who have gone overseas briefly during the first six months from when they initially drew down a loan to be entitled to an interest-free loan from the day the loan was drawn down. Section 65A allows borrowers to object to a decision made by the Commissioner not to grant an interest write-off or to object to the dates on which the interest write-off applies to. The amendments came into force on 1 April 2006.

Transitional provisions repealed

Sections 89 to 102 and section 112 of the Student Loan Scheme Act 1992

The heading to Part 7 and transitional provisions in sections 89 to 102 relating to assessments and repayments for tax years before 1 April 1994 have been repealed because they are redundant. The changes apply from 1 April 2007. Section 11 ensures that Tax Administration Act provisions continue to have effect. The changes applied from 28 March 2007.

Removal of information match between Inland Revenue and the Ministry of Education

Section 62 of the Student Loan Scheme Act 1992, section 307C of the Education Act 1989, section 85D of the Tax Administration Act 1994 and Schedule 3 of the Privacy Act 1993

Sections 62(2)(ab) and 62(2AA) of the Student Loan Scheme Act and section 85D of the Tax Administration Act have been repealed, and section 307C of the Education Act 1989 and Schedule 3 of the Privacy Act 1993 have been amended. The changes are necessary because the information match between Inland Revenue and the Ministry of Education to verify borrowers' study status has been abolished. This data match is now redundant, because the full interest write-off for borrowers who are studying has been abolished. The changes came into force on 1 April 2007.

Repayment deductions

Section 19 of the Student Loan Scheme Act 1992

Section 19(2) ensures that an employer is required to make a deduction from a borrower's salary or wages only if the employer is aware that a special deduction rate applies. The change came into force on 28 March 2007.

Commissioner to assess borrower's repayment obligation

Section 15 (1) of the Student Loan Scheme Act 1992

Section 15(1) has been repealed and replaced. The Commissioner must make an assessment of a borrower's repayment obligation for a tax year as soon as practicable after the borrower provides his or her return of income for that year under the Tax Administration Act, or details of his or her gross income in accordance with section 14A (described under "Simplifying the law on which repayment rules apply").

Interest statements

Section 43 of the Student Loan Scheme Act 1992

Section 43 has been amended to remove any doubt that Inland Revenue may issue an amended interest statement if the amount of interest previously charged is found to be incorrect. The change came into force on 28 March 2007.

Charging late payment penalties

Section 44B of the Student Loan Scheme Act 1992

The change, which came into force on 1 April 1992, being the date the student loan scheme was introduced, ensures that amounts which have become overdue, and thus subject to late payment penalties, are not also subject to interest.

The change was necessary because a change to the contract in 2005, under which interest is charged, failed to include the provision which ensured that interest ceases to be charged once a payment becomes overdue and thus subject to late payment penalties.