Information-matching with New Zealand Customs Service for borrowers in serious default

From 2013 the information match between IR and Customs for child support includes borrowers who are in 'serious default' on their student loan obligations.

Section 208 of the Student Loan Scheme Act 2011, sections 280G, 280H and 280I of the Customs and Excise Act 1996, and section 103 of the Privacy Act 1993

The current information match between Inland Revenue and the New Zealand Customs Service ("Customs") for child support has been extended to include contact information for borrowers who are in "serious default" on their student loan obligations when they enter or leave New Zealand.

Background

A key impediment to collecting repayments from overseas-based borrowers is a lack of up-to-date contact details which prevents Inland Revenue from engaging with this group.

The information-match with Customs will enable certain borrowers who are in "serious default" on their student loan obligations to be identified by the Customs' system immediately upon their arrival or departure from New Zealand. Customs will then be able to quickly transfer to Inland Revenue any contact details obtained from the borrower.

Key features

The existing child support alerts match used by Inland Revenue and Customs has been extended to include student loan borrowers in "serious default". Inland Revenue will send Customs the names, date of birth and IRD number of borrowers who are in serious default.

Customs will then match this list against the names and birthdates of people crossing the border and transfer any contact details obtained from the borrower to Inland Revenue.

Extending the information-match will enable Inland Revenue to initiate contact with selected student loan borrowers in a more timely manner to discuss their situation and payment of outstanding arrears.

Application date

The amendments apply from the day after Royal assent, being 30 March 2013.

Detailed analysis

Section 208 has been amended to allow the exchange of information between Inland Revenue and Customs to assist the Commissioner to locate borrowers, who are in "serious default" on their student loan obligations when they enter or leave New Zealand.

"Serious default" is defined by section 280G of the Customs and Excise Act 1996 to mean having an unpaid amount due and owing, and satisfying criteria established in a manner determined by the Commissioner.

Sections 280H and 280I of the Customs and Excise Act 1996 have been amended to provide for information-matching between Customs and Inland Revenue to allow Inland Revenue to receive arrival and departure information for select borrowers in "serious default".

Section 103(1C) of the Privacy Act 1993 has been amended so Inland Revenue can take immediate action to contact student loan borrowers and recover unpaid amounts owed if they are identified as in "serious default".