Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010

  • repealed
  • Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010: repealed, on 1 April 2012, pursuant to section 225 of the Student Loan Scheme Act 2011 (2011 No 62).

Reprint
as at 1 April 2012

Coat of Arms of New Zealand

Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010

Public Act2010 No 3
Date of assent6 March 2010
Commencementsee section 2
  • Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010: repealed, on 1 April 2012, pursuant to section 225 of the Student Loan Scheme Act 2011 (2011 No 62).


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Inland Revenue Department.


Contents

1 Title

2 Commencement

3 Principal Act amended

Part 1
Amendments to principal Act

4 Interpretation

5 Repayment obligation for New Zealand based borrowers

6 Employer or PAYE intermediary to make repayment deductions

7 New section 20A inserted

8 Full interest write-off for certain borrowers

9 Full interest write-off ceases if borrower is personally absent from New Zealand for 184 days

10 Power of Commissioner to grant exemptions to borrowers who do not satisfy 183-day requirement

11 Conditions to charitable organisation exemption

12 Conditions to marriage, civil union, or de facto exemption

13 New section 38AIA inserted

14 New section 38AJA inserted

15 Terms of full interest write-off

16 New section 38AM inserted

17 Late payment penalties

18 Power of Commissioner in respect of small amounts

19 Borrowers may apply for hardship relief

20 Sections 55 to 55B substituted

21 Effect of Commissioner's decision under section 55

22 Borrowers must inform Commissioner of change of circumstances and Commissioner may review

23 Excess repayments made by residents

24 Cancellation of interest if IRD loan balance repaid early

25 Objection to decision concerning grant of exemption

26 Regulations

Part 2
Consequential amendments to, and revocations of, other enactments

Consequential amendments to other enactment

27 Amendments to Tax Administration Act 1994

28 Annual returns of income not required

29 Officers to maintain secrecy

Consequential revocations of other enactments

30 Student Loan Scheme (Income Amount for Full Interest Write-off) Regulations 2005 revoked

31 Student Loan Scheme (Interest Rates Formulas) Regulations 2006 revoked

32 Student Loan Scheme (Total Interest Rate) Regulations 2009 revoked


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010.

2 Commencement
  • (1) Sections 4, 26(1), 31, and 32 come into force on 1 April 2010.

    (2) The rest of this Act comes into force on the day after the date on which it receives the Royal assent.

3 Principal Act amended

Part 1
Amendments to principal Act

4 Interpretation
  • Section 2(1) is amended by repealing the definition of total interest rate and substituting the following definition:

    total interest rate means the total interest rate that applies in respect of any tax year, calculated in accordance with the formula—

    a% + 0.74% = y%

    where—

    a%
    is the average, rounded to the nearest 2 decimal places, of the monthly average 10-year government bond yield rates published by the Reserve Bank of New Zealand for the 5 years ending in December in the year that precedes the relevant tax year
    y%
    rounded to the nearest 1 decimal place, is the total interest rate for the relevant tax year.
5 Repayment obligation for New Zealand based borrowers
  • Section 14 is amended by repealing subsection (2) and substituting the following subsections:

    • (2) However, if the borrower was overseas based for part of the relevant tax year, then (in calculating that borrower’s repayment obligation under subsection (1)) only the net income that the borrower derived during the period that the borrower was New Zealand based during that tax year must be taken into account.

    • (3) Despite subsections (1) and (2), the repayment obligation for any tax year must not exceed the amount of the IRD loan balance on the last day of that tax year.

6 Employer or PAYE intermediary to make repayment deductions
  • (1) Section 19(1) is amended by inserting , or the Commissioner has given a notice under section 20A, after under section 18.

    (2) Section 19(2) is amended by inserting or an increased repayment deduction rate after “a special deduction rate”.

7 New section 20A inserted
  • The following section is inserted after section 20:

    20A Standard deduction rate may be increased in certain circumstances
    • (1) This section applies if—

      • (a) the amount of a borrower's repayment deductions in the current tax year or in any tax year prior to the current tax year is, or was, less than the amount required under this Act; or

      • (b) a borrower has failed to pay any amount that has become due and payable in accordance with this Act.

      (2) If this section applies, the Commissioner may, in relation to the borrower, issue an increased repayment deduction rate notice that—

      • (a) varies the standard deduction rate by increasing it up to a maximum rate of 15 cents in each complete dollar; and

      • (b) specifies the total amount payable by the borrower (which may include any penalties, interest, or other amount that has become due and payable); and

      • (c) requires the borrower's employers to make repayment deductions at the increased rate until those repayment deductions equal the amount specified under paragraph (b).

      (3) If the Commissioner issues an increased repayment deduction rate notice, the Commissioner must send that notice, together with a notice that complies with section 18(2), directly to the borrower's employers.

      (4) The increased repayment deduction rate applies until the earlier of the date on which—

      • (a) the repayment deductions made in accordance with the increased repayment deduction rate notice equal the amount specified in subsection (2)(b); or

      • (b) the Commissioner notifies the employer otherwise.

      (5) An increased repayment deduction rate notice issued in relation to a borrower under this section revokes—

      • (a) any special repayment deduction rate certificate previously issued to that borrower; and

      • (b) any notice previously given to an employer by that borrower in accordance with section 18.

      (6) The Commissioner must give a borrower a copy of any notice that is given to that borrower's employers under this section as soon as practicable after it is issued.

      (7) Nothing in this section limits the application of sections 53 to 55D.

8 Full interest write-off for certain borrowers
  • Section 38AA(1)(b) is amended by omitting or section 38AJ and substituting , 38AJ, or 38AJA.

9 Full interest write-off ceases if borrower is personally absent from New Zealand for 184 days
  • Section 38AC(5) is amended by omitting or section 38AJ and substituting , 38AJ, or 38AJA.

10 Power of Commissioner to grant exemptions to borrowers who do not satisfy 183-day requirement
  • (1) Section 38AE(1)(b) is amended by inserting that, at the time the borrower did that work, was after charitable organisation.

    (2) Section 38AE(1) is amended by adding ; or and also by adding the following paragraph:

    • (g) the borrower was personally absent from New Zealand because he or she was in 1 or more of Niue, the Cook Islands, Tokelau, or the Ross Dependency.

    (3) Section 38AE is amended by inserting the following subsection after subsection (7):

    • (7A) The conditions in section 38AIA apply to subsection (1)(g).

    (4) Section 38AE(8) is amended by omitting (f) and substituting (g).

    (5) Section 38AE is amended by adding the following subsection:

    • (9) Subsections (1)(g) and (7A) apply with effect from 31 March 2009.

11 Conditions to charitable organisation exemption
  • Section 38AEA is amended by omitting recognised by the United Nations as a developing country in each place where it appears and substituting in each case listed on the Organisation for Economic Cooperation and Development’s list of countries receiving development assistance.

12 Conditions to marriage, civil union, or de facto exemption
  • Section 38AI(d) is amended by adding ; or and also by adding the following subparagraph:

    • (iv) the applicant's partner satisfies the conditions in section 38AJA(4).

13 New section 38AIA inserted
  • The following section is inserted after section 38AI:

    38AIA Conditions to Niue, Cook Islands, Tokelau, and Ross Dependency exemption
    • (1) An applicant under section 38AE(1)(g) must—

      • (a) provide proof that he or she—

        • (i) was personally present in 1 or more of New Zealand, Niue, the Cook Islands, Tokelau, or the Ross Dependency for a period of 183 or more consecutive days after 31 March 2009 (a 183-day period); and

        • (ii) was personally present in New Zealand, Niue, the Cook Islands, Tokelau, or the Ross Dependency for the first day of the 183-day period; and

        • (iii) was not personally absent from New Zealand, Niue, the Cook Islands, Tokelau, and the Ross Dependency for a period, or periods in the aggregate, of more than 31 days during a period of what would otherwise have been a 183-day period; and

      • (b) pay his or her repayment obligation in full when, or before, it falls due each tax year; and

      • (c) provide the Commissioner with the information described in section 14A(2), and section 14A(3) and (4) apply accordingly.

      (2) In specifying under section 38AE(2) when, or the basis on which, an applicant under section 38AE(1)(g) is treated as being personally present in New Zealand for the purposes of section 38AB, the Commissioner must apply sections 38AC(1) to (4) and 38AD as if references in those sections to New Zealand are references to New Zealand (which includes Niue, the Cook Islands, Tokelau, and the Ross Dependency), and section 38AK(2)(b) must be interpreted accordingly.

14 New section 38AJA inserted
  • The following section is inserted after section 38AJ:

    38AJA Power of Commissioner to grant exemption to borrowers undertaking full-time overseas study
    • (1) On the application of a borrower who does not satisfy the 183-day requirement in section 38AB, the Commissioner may, if the Commissioner considers that it is fair and reasonable to do so, grant an exemption to the 183-day requirement to that borrower if either subsection (2) or (3) applies.

      (2) This subsection applies if the principal reason that the borrower does not satisfy the 183-day requirement is that the borrower is undertaking study that—

      • (a) the borrower is enrolled in with a New Zealand tertiary education provider; and

      • (b) if it is completed successfully, will count towards a qualification offered by a New Zealand tertiary education provider; and

      • (c) is assessed by the NZQA as being equivalent to level 7 or above on the New Zealand Register of Quality Assured Qualifications developed by the NZQA under section 253(1)(c) of the Education Act 1989; and

      • (d) is full-time and undertaken overseas as part of either—

        • (i) a formal exchange programme approved by the New Zealand Government; or

        • (ii) a formal agreement between a New Zealand tertiary education provider and an overseas tertiary provider.

      (3) This subsection applies if the principal reason that the borrower does not satisfy the 183-day requirement is that the borrower is undertaking study that—

      • (a) the borrower is enrolled in with a New Zealand tertiary education provider; and

      • (b) if it is completed successfully, will count towards a qualification offered by a New Zealand tertiary education provider; and

      • (c) is assessed by the NZQA as being equivalent to level 8 or above on the New Zealand Register of Quality Assured Qualifications developed by the NZQA under section 253(1)(c) of the Education Act 1989; and

      • (d) is full-time and undertaken overseas; and

      • (e) cannot be completed in New Zealand.

      (4) An applicant under subsection (1)—

      • (a) must provide the Commissioner with evidence from the applicant's New Zealand tertiary education provider verifying that the applicant's study meets the requirements of either—

        • (i) subsection (2)(b), (c), and (d)(i) or (ii); or

        • (ii) subsection (3)(b) to (e); and

      • (b) must supply the Commissioner with all other information, and in the manner, that the Commissioner may reasonably require in order to establish whether the ground for the grant of an exemption under subsection (1) applies; and

      • (c) must provide the Commissioner with the information specified in section 14A(2), and section 14A(3) and (4) apply accordingly.

      (5) If the Commissioner grants an exemption under subsection (1), the Commissioner must specify either—

      • (a) the start and end dates for the period for which the relevant borrower is treated as being personally present in New Zealand for the purposes of section 38AB; or

      • (b) the conditions that must apply or be met in order for the relevant borrower to be treated as being personally present in New Zealand for the purposes of section 38AB.

      (6) In this section,—

      NZQA means the New Zealand Qualifications Authority established under Part 20 of the Education Act 1989

      overseas tertiary provider means an institution or organisation that—

      • (a) provides tertiary education or training; and

      • (b) is based in a country other than New Zealand; and

      • (c) is registered by an appropriate education authority in that country.

      (7) This section applies with effect from 31 March 2007.

15 Terms of full interest write-off
  • Section 38AK(2)(a)(ii) is amended by omitting or section 38AE(2) or section 38AJ(3) and substituting , 38AE(2), 38AJ(3), or 38AJA(5).

16 New section 38AM inserted
  • The following section is inserted after section 38AL:

    38AM Full interest write-off for quick repayment of loan balance
    • (1) This section applies to a borrower who—

      • (a) satisfies the 183-day requirement in section 38AB(1) and (2); and

      • (b) fully repays his or her loan balance before the end of the 183-day period.

      (2) The amount of interest calculated on the loan balance of a borrower to whom this section applies must be reduced to zero for the period—

      • (a) beginning on the first day of the 183-day period; and

      • (b) ending on the day on which the borrower fully repays his or her loan balance.

      (3) This section applies with effect from 31 March 2006.

17 Late payment penalties
18 Power of Commissioner in respect of small amounts
19 Borrowers may apply for hardship relief
  • Section 54(1) is amended by repealing paragraph (a) and substituting the following paragraph:

    • (a) hardship relief for any tax year prior to the current tax year:.

20 Sections 55 to 55B substituted
  • Sections 55 to 55B are repealed and the following sections substituted:

    55 Hardship relief for any tax year prior to current tax year
    • (1) If an application is made under section 54(1)(a), the Commissioner may, for any period the Commissioner considers equitable, retrospectively decrease that borrower's repayment obligation for any tax year prior to the current tax year if the Commissioner—

      • (a) is satisfied that payment of that repayment obligation is causing, or would cause, serious hardship to the borrower; or

      • (b) considers that there are other special reasons that make it fair and reasonable to do so.

      (2) Except as set out in section 55A, the Commissioner must not refund any amount that was deducted or paid (if any) to meet a repayment obligation for any tax year prior to the current tax year.

    55A Hardship relief for tax year immediately prior to current tax year may include refund
    • (1) If an application is made under section 54(1)(a), the Commissioner may, for any period the Commissioner considers equitable, refund any amount that was deducted or paid to meet a repayment obligation in the tax year immediately prior to the current tax year if the Commissioner—

      • (a) is satisfied that payment of that repayment obligation is causing, or would cause, serious hardship to the borrower; or

      • (b) considers that there are other special reasons that make it fair and reasonable to do so.

      (2) If the Commissioner refunds any amount to a borrower under subsection (1), the Commissioner must—

      • (a) retrospectively decrease that borrower's repayment obligation for the relevant tax year; and

      • (b) refund the whole or part of the portion of the repayment obligation that is the difference in assessment amounts.

      (3) A refund that is made under this section must be made in the manner required under section 184A of the Tax Administration Act 1994.

    55B Hardship relief for current tax year or next tax year
    • (1) If an application is made under section 54(1)(b) or (c), the Commissioner may, for any period the Commissioner considers equitable, reduce any amount that must be deducted or paid in order to meet the repayment obligation assessed or to be assessed for the current tax year or the next tax year if the Commissioner—

      • (a) is satisfied that the amount being deducted or paid, or to be deducted or paid, has caused or will cause serious hardship to the borrower; or

      • (b) considers that there are other special reasons that make it fair and reasonable to do so.

      (2) If the Commissioner reduces the amount to be deducted or paid by a borrower under subsection (1), the Commissioner must, as appropriate, do 1 of the following:

      • (a) issue to that borrower a special repayment deduction rate certificate that varies the standard deduction rate in accordance with the Commissioner's decision under subsection (1) and, when assessed, reduce that borrower's repayment obligation accordingly; or

      • (b) reduce the percentage payable by that borrower under section 27(1) in accordance with the Commissioner's decision under subsection (1) and, when assessed, reduce that borrower's repayment obligation accordingly; or

      • (c) reduce that borrower's repayment obligation under section 34 in accordance with the Commissioner's decision under subsection (1).

      (3) If the Commissioner reduces the amount to be deducted from, or paid by, a borrower to zero, section 18 does not apply to that borrower for the period for which that reduction applies.

      (4) If a borrower has given his or her employer notice in accordance with section 18 and the Commissioner subsequently reduces the amount to be deducted from, or paid by, a borrower to zero, the borrower must give a copy of the special repayment deduction rate certificate to his or her employer as soon as practicable after it is issued.

      (5) Section 24F of the Tax Administration Act 1994 applies, with all necessary modifications, to any special repayment deduction rate certificate issued under this section.

21 Effect of Commissioner's decision under section 55
  • (1) The heading to section 55C is amended by omitting section 55 and substituting section 55, 55A, or 55B.

    (2) Section 55C(1) is amended by omitting section 55 and substituting section 55, 55A, or 55B.

22 Borrowers must inform Commissioner of change of circumstances and Commissioner may review
  • Section 55D(1)(b) is amended by omitting section 55 and substituting section 55, 55A, or 55B.

23 Excess repayments made by residents
  • The heading to section 56 is amended by omitting residents and substituting borrowers.

24 Cancellation of interest if IRD loan balance repaid early
25 Objection to decision concerning grant of exemption
  • (1) Section 65A(a) is amended by omitting or section 38AJ and substituting , 38AJ, or 38AJA.

    (2) Section 65A(b) is amended by omitting section 38AF, 38AG, 38AH, 38AI, or 38AJ(2) and substituting section 38AEA, 38AF, 38AG, 38AH, 38AI, 38AIA, 38AJ(2), or 38AJA(4).

    (3) Section 65A(c) is amended by omitting or section 38AJ(3)(a) and substituting , 38AJ(3)(a), or 38AJA(5)(a).

    (4) Section 65A(d) is amended by omitting or section 38AJ(3)(b) and substituting , 38AJ(3)(b), or 38AJA(5)(b).

26 Regulations

Part 2
Consequential amendments to, and revocations of, other enactments

Consequential amendments to other enactment

27 Amendments to Tax Administration Act 1994
28 Annual returns of income not required
29 Officers to maintain secrecy

Consequential revocations of other enactments

30 Student Loan Scheme (Income Amount for Full Interest Write-off) Regulations 2005 revoked
31 Student Loan Scheme (Interest Rates Formulas) Regulations 2006 revoked
32 Student Loan Scheme (Total Interest Rate) Regulations 2009 revoked

Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010. The reprint incorporates all the amendments to the Act as at 1 April 2012, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)
  • Student Loan Scheme Act 2011 (2011 No 62): section 225