Repayment obligations of overseas-based borrowers
2012 amendment clarifies that a student loan borrower's overseas-based repayment obligation is based on the loan balance at the end of the previous tax year.
Sections 110(6)(b)(iii) and 111(5)(b)(iii)
An amendment has been made to clarify that an overseas-based repayment obligation for a year is based on a borrower's consolidated loan balance at the end of the previous tax year. The consolidated loan balance is limited to:
- the loan balance at that time;
- plus the annual administration fee; and
- reduced by the amount of the excess repayment bonus.
Previously it could be construed that for the purpose of determining a borrower's overseas-based repayment obligation, the excess repayment bonus is added to the borrower's loan balance instead of being subtracted from it as intended.
This amendment applies from 1 April 2012.