Use of alternate contact details received via the repayment holiday application process and via StudyLink under section 16a

2012 amendment details when IR will get in touch with a nominated contact person received from StudyLink and what is required of the contact person.

New sections 193A and 193B, section 59 of the Student Loan Scheme Amendment Act 2012 (transitional provision) and schedule 9

Background

This item details when Inland Revenue will get in touch with a nominated contact person received from StudyLink or when a borrower applies for a repayment holiday. It also explains what will be required if the contact person is requested to assist.

Application date

The changes apply from 1 April 2012.

Detailed analysis

New section 193A prescribes when the alternative contact details will be used, and what is required of the alternative contact person, if contacted by Inland Revenue.

Section 193A allows the Commissioner to advise that a person has been nominated as a contact person. This initial contact with the person is also an opportunity for Inland Revenue to explain what the role of the contact person is and when they will be requested to assist.

The contact person may be requested to assist if the borrower has an unpaid amount, Inland Revenue does not have up-to-date address details, or if Inland Revenue is uncertain about the accuracy of the address details. The contact person will only be asked:

  • to notify the Commissioner of the borrower's current address details; or
  • to ask the borrower to get in touch with Inland Revenue and update their contact details.

Before requesting the assistance of the contact person, the contact person must first confirm that they are willing to act as the borrower's contact person. The fact that the contact person must confirm that they are willing to act on behalf of the borrower reflects that the onus is on the borrower to have asked if the contact person is willing to act before providing those details to Inland Revenue. No details of the loan such as the loan balance or the amount of the default will be given to the contact person.

The borrower has a continuing obligation to keep details of the contact person up-to-date. This requirement reflects the ability of the contact person to withdraw from being a contact person for the borrower. The borrower must keep details up-to-date if the contact person dies or for whatever reason is ineligible, unable or unwilling to act in that capacity (section 193B).

Section 193(A)(6) defines "contact person" as an individual whose name has been received from StudyLink under section 16A, or an individual nominated by the borrower under section 107A (repayment holiday provisions) or section 193B.

Section 59 of the Student Loan Scheme Amendment Act 2012 is a transitional provision and recognises that the ability to receive contact details from StudyLink applies from 1 January 2013. Therefore, until 31 December 2012, the definition of "contact person" in section 193A(6) of the Student Loan Scheme Act 2011 must be read without reference to the contact person details received from StudyLink under section 16A. Section 59 will then be repealed from 1 January 2013.

Schedule 9 has been amended to include reference to new section 193A in section 81 of the Tax Administration Act 1994.