Student Loan Scheme Act 1992

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Reprint as at 30 August 2011

Student Loan Scheme Act 1992

Public Act1992 No 141
Date of assent21 December 1992
Commencement21 December 1992


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.



1 Short Title and application

2 Interpretation

2A Application of Act to bonded scholarships

3 Act to bind the Crown

Part 1
Transfer of loan balances to Commissioner for collection

Transfer of loan balances

4 Transfer of loan balances to Commissioner for collection

5 Notice to borrower

Objections before transfer of loan balance to Commissioner

6 Right to object to amount of loan balance being transferred

7 Loan manager to consider objections

8 Power to require objection to be determined by chief executive

9 Chief executive to consider objections

10 Extension of time for objection

11 Right to apply to Disputes Tribunal or District Court

12 Prohibition on transfers

13 Notice of total amount outstanding

Part 2
Collection of repayments from New Zealand based borrowers

14 Repayment obligation for New Zealand based borrowers

Returns and assessments

14A Declaration of worldwide income by certain borrowers

15 Commissioner to assess borrower's repayment obligation

16 Sections of Tax Administration Act 1994 and Income Tax Act 2007 relating to returns and assessments to apply

Repayment deductions from salary and wages

17 Borrowers to whom repayment deduction provisions of this Part apply

17B Repayment codes for application of PAYE rules

18 Borrower's notice to employer of requirement for repayment deductions

19 Employer or PAYE intermediary to make repayment deductions

20 Standard deduction rate

20A Standard deduction rate may be increased in certain circumstances

21 Special deduction rates

22 Commissioner may assess amount of repayment deductions

23 Deductions from income-tested benefits

24 Information to show repayment deductions made

25 PAYE rules of Income Tax Act 2007 to apply to repayment deductions

Interim repayments

26 Borrowers to whom interim repayment provisions of this Part apply

27 Amount of interim repayments

28 Interim repayments to be paid in same manner as provisional tax

Terminal repayments

29 Borrowers to whom terminal repayment provisions of this Part apply

30 Payment of terminal repayment obligation

Part 3
Collection of repayments from overseas based borrowers

31 Definitions used in this Part

32 Overseas based borrowers are entitled to 3-year repayment holiday

32A Repayment obligations of non-resident borrowers [Repealed]

32B Interest chargeable [Repealed]

33 Borrowers may choose not to have repayment holiday

34 Repayment obligations of overseas based borrowers

35 Repayment obligations of overseas based borrowers subject to penalties

36 Repayment to be made by instalments

36A Repayment obligation for borrowers who are overseas based for part of tax year

36B Assessments in year borrower is overseas based

Part 4
Miscellaneous provisions applying to student loan scheme

Notification requirements

37 Borrower to advise Commissioner of absence from New Zealand

38 Borrower to advise Commissioner of return to New Zealand

Full interest write-off for borrowers present in New Zealand or granted an exemption

38AA Full interest write-off for certain borrowers

38AB 183-day requirement

38AC Full interest write-off ceases if borrower is personally absent from New Zealand for 184 days

38AD Treatment of partial days

38AE Power of Commissioner to grant exemptions to borrowers who do not satisfy 183-day requirement

38AEA Conditions to charitable organisation exemption

38AF Conditions to unexpected delay exemption

38AG Conditions to unplanned personal absence exemption

38AH Conditions to employment or occupation absence exemption

38AI Conditions to marriage, civil union, or de facto exemption

38AIA Conditions to Niue, Cook Islands, Tokelau, and Ross Dependency exemption

38AJ Power of Commissioner to grant exemption to borrowers undertaking study at post-graduate or under-graduate level overseas

38AJA Power of Commissioner to grant exemption to borrowers undertaking full-time overseas study

38AK Terms of full interest write-off

38AL Commissioner's discretion for initial 183-day period for new borrowers

38AM Full interest write-off for quick repayment of loan balance

Full interest write-off for certain students


38A Full interest write-off for full-time, full-year students [Repealed]

38B Full interest write-off for part-time or part-year students [Repealed]

38C Amount of full interest write-off [Repealed]

38D Conditions for full-interest write-off [Repealed]

Base interest write-off


39 Base interest write-off where income below repayment threshold [Repealed]

Interest reduction


40 Interest reduction where base interest exceeds 50% of repayment obligation [Repealed]

41 Conditions for base interest write-off [Repealed]

Other provisions relating to interest

42 Interest adjustment in respect of credit balances

43 Interest statement

Penalties for late payment

44 Late payment penalties

44A Underestimation penalty where interim repayments underestimated as at final instalment date

44B No interest on portion of loan balance subject to penalty

45 Notification of penalties

Ten percent bonus for excess repayments

45A Interpretation

45B Meaning of excess repayment

45C Borrower's entitlement to 10% bonus for total excess repayments of $500 or more

45D Borrower's entitlement to bonus if IRD loan balance is less than $550

45E Borrower may be entitled to 10% bonus if under-deduction is due to PAYE system

45F Manner in which 10% bonus is to be provided and restriction on amount of 10% bonus

45G Consequences of refund

45H Commissioner must advise borrowers to seek financial advice

45I Application of sections 45A to 45H


46 Recovery of repayment obligation

Date on which payments due

47 Payment date not otherwise specified

Dates on which payments deemed to be received and credited

48 Date on which payments deemed to have been made

49 Date on which payments deemed to have been credited

50 Priority of payments


51 Power of Commissioner in respect of small amounts

51A Commissioner may refrain from collecting amounts between $5 and $333 [Expired]

52 No liability in respect of small amounts of penalty

53 Relief from penalty

54 Borrowers may apply for hardship relief

55 Hardship relief for any tax year prior to current tax year

55A Hardship relief for tax year immediately prior to current tax year may include refund

55B Hardship relief for current tax year or next tax year

55C Effect of Commissioner's decision under section 55, 55A, or 55B

55D Borrowers must inform Commissioner of change of circumstances and Commissioner may review


56 Excess repayments made by borrowers

57 Election by overseas based borrower to receive refund or to apply overpayment to loan balance

57A Application of sections 57B to 57D

57B No refunds for deductions or payments made prior to 31 March 2006

57C Certain refunds not entitled to full interest write-off under section 38AK

57D Commissioner's discretion in cases of significant financial hardship

58 Repayment obligation paid in excess may be set off against increased repayment obligation when assessments reopened

58A Repayment obligation paid in excess may be refunded when assessments reopened

59 Appropriation of refunds

Miscellaneous provisions

60 Write-off of loan balance

60A Cancellation of interest if IRD loan balance repaid early

61 Tax year other than 12 months due to change in balance date

62 Disclosure of information

62A Disclosure of information for information matching purposes

62B Power of Commissioner to access arrival or departure information

63 Act to supplement loan contract

63A Loan contract enforceable against minor

63B Initial disclosure

63C Certain information must be disclosed in loan contract

63D Method of informing borrowers

63E Continuing disclosure of information

63F Content of information disclosed

63G Disclosure of changes to obligations under student loan contract

63H Direct disclosure of information and changes

63I Public disclosure of changes

63J Satisfaction of requirements to disclose

63K Cap on student loan establishment fees

63L Annual administration fee

63M Student loan contracts are not credit contracts

63N Commissioner may exercise rights in loan contracts to recall loans

Part 5
Challenges after transfer of loan balance to Commissioner

64 Challenge to assessment of repayment obligation

65 Challenge to amount of interest charged

65A Objection to decision concerning grant of exemption

66 Challenge to penalty

66A Objection to decisions concerning penalty amnesty [Repealed]

66B Objection to decision concerning significant financial hardship

67 Challenge to assessment of repayment deduction

68 Challenge to penal repayment obligation

69 Objector

69A Application of Parts 4A and 8A of Tax Administration Act 1994

69B No right of challenge to interest payable under loan contract

70 Manner in which objection to be made [Repealed]

71 Time for objection [Repealed]

72 Objection to amended assessment or notice [Repealed]

73 Extension of time for objection [Repealed]

74 Commissioner to consider objections [Repealed]

75 Objector may refer disallowed objections to Taxation Review Authority [Repealed]

76 Objections to which this Part does not apply [Repealed]

Part 6
Offences and penalties

77 Offences in respect of repayment deductions

78 Penalties for offences in respect of repayment deductions

79 Other offences

80 Officers and employees of corporate bodies [Repealed]

81 Offence to prejudice employees because of student loan repayment liability

82 Proceedings to be taken summarily

83 Information may charge several offences

84 Information may be laid within 10 years

85 Penal repayment obligation in case of evasion

86 Penal charge for default in paying repayment deduction [Repealed]

Part 7
Regulations and miscellaneous matters

87 Regulations

88 Full interest write-offs, base interest write-offs, and interest reductions validated

Part 8
2007/08 transitional provisions for fresh start for certain borrowers

89 Interpretation

Fresh start for certain non-resident borrowers

90 No need to issue non-resident repayment obligations for period before 1 April 2007

91 Penalties cancelled, and interest imposed, for certain non-resident borrowers

New amnesty

92 Application of sections 93 to 105

93 Borrowers whose loan balance is not increased under section 103

94 Amnesty condition for borrowers who apply for amnesty after 31 March 2007

95 Payment arrangements if amnesty application date is between 1 April 2007 and 31 August 2007

96 Payment arrangements if amnesty application date is between 1 September 2007 and 29 February 2008

97 Payment arrangements if amnesty application date is in March 2008

98 Commissioner may reduce instalments if significant financial hardship

98A No repayment deductions to be made from income-tested benefits before 1 April 1994 [Repealed]

99 Relationship with New Zealand based repayment obligations

100 Amnesty condition for people who applied for old amnesty before 1 April 2007

101 What happens if amnesty condition breached

102 One time opportunity to correct amnesty condition breach

103 Increase to loan balance if borrower does not come under amnesty or if amnesty condition breached

104 Objection to decisions concerning penalty amnesty

105 Commissioner must apply rest of Act accordingly

Part 9
Other transitional provisions

Repayment holiday entitlements for borrowers who are overseas based on 1 April 2007

106 Full repayment holiday entitlement for borrowers who are overseas based on 1 April 2007 and compliant

107 Restricted repayment holiday entitlements for borrowers who are overseas based on 1 April 2007 and non-compliant

108 Restricted repayment holiday entitlements for borrowers who are overseas based on 1 April 2007 and do not comply with amnesty conditions

109 Interrelationship of sections 31 to 36B, Part 8, and sections 107 and 108

110 Full repayment holiday entitlement for borrowers who meet amnesty conditions

111 Full repayment holiday entitlement for borrowers who meet amnesty conditions and do not apply under section 110

Application of Tax Administration Act 1994

112 Application of repealed provisions of Tax Administration Act 1994

Student Loan Scheme Amendment Act 1996

Student Loan Scheme Amendment Act 2000

Student Loan Scheme Amendment Act 2005

Education Amendment Act 2006

Student Loan Scheme Amendment Act 2007

Reprint notes

An Act to provide for the assessment and collection of loan repayments under the Crown's student loan scheme and to otherwise facilitate the administration of that scheme