Student Loan Scheme Act 2011

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Version as at 30 March 2022

Student Loan Scheme Act 2011

Public Act		2011 No 62
Date of assent		29 August 2011
Commencement		see section 2

Note

The Parliamentary Counsel Office has made editorial and format changes to this version using the powers under subpart 2 of Part 3 of the Legislation Act 2019.

Note 4 at the end of this version provides a list of the amendments included in it.

This Act is administered by the Inland Revenue Department.

1	Title
2	Commencement
	Part 1 Preliminary matters, loan advances, and New Zealand-based and overseas-based borrowers
	Subpart 1—Preliminary provisions
3	Purposes
4	Interpretation
5	Meaning of unpaid amount
6	Application of Act
7	Application of Act to bonded scholarships
8	Act binds the Crown
8A	Application of provisions of Act
	Subpart 2—Establishment of student loan
9	Purposes of sections 10, 11, 16, and 17
10	Loan manager must notify Commissioner of persons who apply for student loan
11	Commissioner must confirm information provided by loan manager
12	Loan manager must provide copy of loan contract
13	Certain information must be disclosed in loan contract
14	Student loan establishment fee
15	Right to cancel loan contract
16	Loan manager must notify Commissioner of borrower’s details
16A	Loan manager must notify Commissioner of any details held about borrower’s contact person
17	Loan manager must transfer loan advance debts to Commissioner for collection
18	Commissioner must notify borrowers of loan advances
19	Commissioner must inform borrowers about consolidated loan balance
20	Borrower must be notified of certain changes to obligations
	Subpart 3—Determining whether borrowers are New Zealand-based or overseas-based
21	Overview of being New Zealand-based or overseas-based
22	Meaning of New Zealand-based
23	Meaning of overseas-based
24	Treatment of partial days
	Certain borrowers may be treated as being physically in New Zealand
25	Commissioner may treat certain borrowers as being physically in New Zealand
26	Method of making application and provision of evidence and information
27	Commissioner must notify borrower and specify period or conditions when granting application
27A	Commissioner must keep and publish list of charities
27B	When entity qualifies to be listed as charity
27C	Application by entity to be listed as charity
27D	Commissioner may list tax charities even if no application made
27E	Commissioner may remove entity’s listing as charity
	Borrowers must notify Commissioner of absence from and return to New Zealand
28	Borrower to notify Commissioner of absence from New Zealand of 184 or more days
29	Borrower to notify Commissioner of return to New Zealand of more than 183 days
	Part 2 Repayment obligations of borrowers
30	Borrower’s liability to repay consolidated loan balance
31	Repayment obligations that apply to New Zealand-based borrowers and overseas-based borrowers
32	Interrelationship between subparts 1 and 2
	Subpart 1—New Zealand-based borrowers’ repayment obligations for salary or wages
33	Application of this subpart
	Repayment codes
34	Repayment codes for New Zealand-based borrowers who derive salary or wages
35	Borrowers with “SL” repayment code must notify employers
	Salary or wage deductions
36	Employer or PAYE intermediary must make standard deductions from salary or wages
37	Deduction rates that apply to standard deductions from salary or wages
38	Employer or PAYE intermediary must make Commissioner deductions from salary or wages
39	Employer or PAYE intermediary must make borrower deductions from salary or wages
40	Deductions from main benefits
	Unused repayment threshold may be allocated to secondary employment earnings
41	Definitions relating to repayment thresholds
42	Application for unused repayment threshold to be allocated to secondary employment earnings
43	Determining estimated salary or wages
44	Calculating borrower’s unused repayment threshold for pay period
45	Special deduction rate certificate for unused repayment threshold
46	Issue and application of special deduction rate certificate
47	Ongoing obligations of borrower to review and notify
48	Time when special deduction rate ceases to apply
	Commissioner deductions may be used to recover amounts that remain unpaid
49	Commissioner must issue additional deduction rate notice to obtain Commissioner deductions
50	Procedures for issue of additional deduction rate notice
	Further means of recovering amounts that remain unpaid
51	Assessment of standard deductions that ought to have been made
52	Recovery of assessed amounts
	Exemption from standard deductions for borrowers who are full-time students
53	Definitions relating to exemption for full-time students
54	Borrowers who are eligible for exemption from standard deductions
55	Declaration by eligible borrowers for exemption from standard deductions
56	Notice from Commissioner
57	Consequences of exemption from standard deductions
58	Withdrawal of declaration
59	Notice of change of circumstances
60	When exemption from standard deductions ceases to apply
	Information and determinations
61	Information to show salary or wage deductions made
62	Commissioner must determine question about amount of salary or wage deductions
62A	Commissioner may notify employers when loan balance close to zero
	Standard deductions resulting in significant under-deductions or over-deductions
63	Commissioner determines what is significant under-deduction or significant over-deduction
64	Standard deductions are full and final unless significant error
65	Significant over-deduction identified by borrower
66	Commissioner must determine whether significant over-deduction made
67	Procedure if significant over-deduction made
68	Applicable procedures if significant under-deduction
	Commissioner deductions resulting in over-deductions
68A	Commissioner over-deduction identified by borrower
68B	Commissioner must determine whether Commissioner over-deduction made
68C	Procedure if Commissioner over-deduction made
	Matters of general application to salary or wage deductions
69	Prohibition on applications or declarations to maintain integrity of student loan scheme
70	PAYE rules apply to salary or wage deductions
71	Salary or wage deductions in addition to income tax withheld
	Subpart 2—Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages
72	Application of this subpart
73	Meaning of adjusted net income, Schedule 3 adjustments, and related terms
74	Notification of Schedule 3 adjustments
75	Extension of time for notification of Schedule 3 adjustments
76	Commissioner to assess borrower’s end-of-year repayment obligation
76A	Commissioner must assess borrowers to whom section 72(b) applies as having zero repayment obligation
77	Calculation of borrower’s end-of-year repayment obligation if salary or wages less than annual repayment threshold
78	Calculation of borrower’s end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold
79	Payment of end-of-year repayment obligation
80	Calculation of terminal payment for tax year
81	Due date for terminal payment
82	Calculation of interim payments for next tax year
83	Commissioner may assess interim payments if information for preceding year not provided
84	Due dates for payment of interim payments
85	Commissioner’s powers in relation to due dates
86	Interim payments to be paid in same manner as provisional tax
87	Consequence of failure to meet repayment obligations
	Subpart 3—New Zealand-based borrowers’ repayment obligations for other income [Repealed]
88	Application of this subpart [Repealed]
88A	Meaning of adjusted net income [Repealed]
	Assessment of other income repayment obligation [Repealed]
89	Commissioner to assess borrower’s other income repayment obligation [Repealed]
	Calculation of other income repayment obligations [Repealed]
90	Calculation of borrower’s other income repayment obligation where salary or wages below threshold [Repealed]
91	Calculation of borrower’s other income repayment obligation where salary or wages equal to or above threshold [Repealed]
	Payment of other income repayment obligations [Repealed]
92	Payment of other income repayment obligations [Repealed]
93	Calculation of remaining repayments for tax year [Repealed]
94	Due dates for payment of remaining repayments [Repealed]
95	Calculation of interim payments for next tax year [Repealed]
96	Commissioner may assess interim payments if information for preceding year not provided [Repealed]
97	Due dates for payment of interim payments [Repealed]
98	Commissioner’s powers in relation to due dates [Repealed]
99	Interim payments to be paid in same manner as provisional tax [Repealed]
100	Consequence of failure to meet repayment obligations [Repealed]
	Reduction of deduction rate for borrower with lower repayment obligation [Repealed]
101	Borrower may apply for reduction of deduction rate to reflect lower repayment obligation [Repealed]
102	Special deduction rate certificate for lower repayment obligation [Repealed]
103	Issue and application of special deduction rate certificate [Repealed]
104	Time when special deduction rate ceases to apply [Repealed]
	Subpart 4—Overseas-based borrowers’ repayment obligations
105	Application of this subpart
106	Meaning of temporary repayment suspension
	Temporary repayment suspension of overseas-based repayment obligations
107	Borrowers who intend to be overseas-based may apply for temporary repayment suspensions
107A	Contact person to be nominated
107B	Grant of temporary repayment suspension
108	Duration of temporary repayment suspension
108A	Borrowers who have had, or are having, temporary repayment suspensions under Student Loan Scheme Act 1992
	Assessment of overseas-based repayment obligation
109	Assessments for years in which borrower is overseas-based
	Calculation and payment of overseas-based repayment obligation
110	Repayment obligations of overseas-based borrowers
111	Exceptions to repayment obligations of overseas-based borrowers
112	Repayment to be made by instalments
113	Consequence of failure to meet repayment obligations
	Subpart 5—New Zealand-based non-resident borrowers and borrowers with New Zealand-based and overseas-based repayment obligations
114	Notification of Schedule 3 adjustments by New Zealand-based non-resident borrowers
114A	Extension of time for notification of Schedule 3 adjustments
115	Repayment obligations of borrowers who are overseas-based for part of tax year
115A	Reassessment of borrower’s overseas-based repayment obligations in year of return to New Zealand
116	Overseas-based borrowers who derive salary or wages from New Zealand
117	Overseas-based borrower’s standard and Commissioner deductions satisfy overseas-based repayment obligation [Repealed]
	Part 3 Excess repayments
118	Interpretation [Repealed]
119	Meaning of excess repayment
120	Commissioner must notify borrower of excess repayment
121	Options that apply to excess repayments
122	Exception to general rule if repayment obligations for prior tax years reassessed
	Subpart 1—Excess repayment bonus [Repealed]
123	Borrower’s entitlement to 10% bonus for excess repayment of $500 or more [Repealed]
124	Borrower’s entitlement to bonus if loan balance is less than $550 [Repealed]
125	Borrower may be entitled to 10% bonus if under-deduction is due to PAYE system [Repealed]
126	Time at which 10% bonus is credited [Repealed]
127	Restriction on amount of 10% bonus [Repealed]
128	Application of sections 118 to 122 and this subpart to part years [Repealed]
129	Consequences of refund or credit to next tax year [Repealed]
130	Commissioner must advise borrowers to seek financial advice [Repealed]
	Subpart 2—Refund of excess repayments and satisfaction of future repayment obligation
131	Limit on use of excess repayments
132	Borrower may receive refund or apply excess repayment to future repayment obligations
	Part 4 Interest, relief, penalties and offences, rights of objection, and rights to challenge
	Subpart 1—Interest
133	No interest applied to student loans except as specified in this Part
	Loan interest charged for all overseas-based borrowers
134	Loan interest charged for all overseas-based borrowers
135	Loan interest calculated daily and charged and compounded annually
136	Notification that loan interest has compounded
137	Full interest write-off for New Zealand-based borrowers [Repealed]
138	Loan interest written off for quick repayment of consolidated loan balance
	Late payment interest
139	Late payment interest charged on unpaid amount
140	Notification of late payment interest
141	Late payment interest reduced if instalment arrangement complied with
141A	Late payment interest reduced if deduction or extraction notice applies
	Matters of general application to interest
142	No interest on consolidated loan balance in credit
143	Commissioner’s power to correct interest when charged in error
	Subpart 2—Relief
	Different types of relief
144	Power of Commissioner in relation to small amounts
145	Application for different types of relief for borrower
	Relief from late payment interest
146	Commissioner may grant relief from late payment interest
	Relief from penalties
146A	Commissioner may grant relief from penalties
	Hardship relief
147	Hardship relief for any tax year
148	Special deduction rate certificate for hardship relief
149	Issue and application of special deduction rate certificate
150	Time when special deduction rate ceases to apply
151	Effect of Commissioner’s decision under section 147
152	Borrowers must notify Commissioner of change of circumstances
153	Commissioner may review grant of hardship relief
	Instalment arrangements
154	Application for instalment arrangement
	Subpart 3—Penalties and offences
	Late filing penalties
155	Late notification penalty for Schedule 3 adjustments under section 74
156	Due dates for payment of late notification penalty
	Student loan shortfall penalties
157	Definitions relating to student loan shortfall penalties
158	Student loan shortfall penalties may be imposed on certain borrowers
159	Commissioner may impose student loan shortfall penalties
160	Notification and payment obligations if Commissioner imposes student loan shortfall penalty
161	Student loan shortfall penalty reduced or removed to reflect change to shortfall penalty
	Underestimation penalty [Repealed]
161A	Underestimation penalty where interim payments underestimated as at last interim payment date [Repealed]
	Offences
162	Certain offence provisions in Tax Administration Act 1994 apply to borrowers
162A	Offence for default of overseas-based repayment obligation
162B	Arrest of liable person
163	Offence to prejudice employees because of student loan repayment liability
164	Proceedings to be commenced by Commissioner
165	Charging document may charge several offences
166	Time for filing charging document
	Subpart 4—Borrower’s right to object to loan manager about details of loan advances
167	Borrowers may object to details of loan advances
168	Loan manager must consider objections
169	Power to require objection to be determined by chief executive
170	Chief executive must consider objections required to be determined by chief executive
171	Right to apply to Disputes Tribunal or District Court
172	Notification of Disputes Tribunal’s or District Court’s decision about objection
	Subpart 5—Dispute procedures and rights to challenge
	Dispute procedures
173	Part 4A of Tax Administration Act 1994 applies to disputes under this Act
	Rights to challenge and challenge procedures
174	Dispute process must be completed before challenge is made
174A	Part 8A of Tax Administration Act 1994 applies to challenges under this Act
175	Challenge to details of consolidated loan balance
176	Challenge to decision concerning treating borrowers as being physically in New Zealand
176A	Challenge to decision relating to listing of entity as charity
177	Challenge to special deduction rate certificate for unused repayment threshold
178	Challenge to additional deduction rate notice
179	Challenge to determination of salary or wage deduction
180	Challenge to decision regarding significant over-deduction
181	Challenge to prohibition on applications or declarations
182	Challenge to assessments
182A	Challenge to decision concerning temporary repayment suspension
183	Challenge to interest charged
184	Challenge to decision concerning relief
185	Challenge to late notification penalty
186	Challenge to student loan shortfall penalty
187	Person who may make challenge
188	Commissioner’s decision on challenges [Repealed]
	Part 5 Matters of general application and miscellaneous matters
	Subpart 1—Matters of general application
189	Annual administration fee
190	Tax year other than 12 months due to change in balance date
191	Limit on repayment obligation for pay period or tax year
192	Payment date not otherwise specified
193	Recovery of unpaid amount
193A	Contact person may be requested to assist
193B	Changes relating to identity and details of contact person
193C	Changes relating to contact details of borrower
194	Order in which certain deductions and payments offset against borrower’s consolidated loan balance
195	Date on which salary or wage deductions and payments treated as being made and credited
196	Cancellation of interest if consolidated loan balance repaid early
197	Write-off of consolidated loan balance
198	Commissioner may remedy incorrect application of Act
199	Manner of making refunds
200	Appropriation of refunds
201	Loan advances and other information may be altered
202	Provisions of Tax Administration Act 1994 and Income Tax Act 2007 to apply to this Act
	Subpart 2—Miscellaneous matters
	Interaction with loan contracts and other enactments
203	This Act overrides loan contracts
204	Commissioner may exercise rights in loan contracts to recall loans
205	Loan contract enforceable against minor
206	Student loan contracts are not credit contracts
	Disclosure of information
207	Disclosure of information between authorised persons
208	Disclosure of information between Inland Revenue Department and New Zealand Customs Service for information-matching purposes
209	Power of Commissioner to access arrival or departure information
209A	Disclosure of information to Australian Taxation Office in relation to borrowers who are, or may be, overseas-based
	Informing and notifying under this Act
210	Meaning of inform
211	Meaning of notify
212	Meaning of notify a person in writing
213	Meaning of formally notify [Repealed]
214	Notice requirements of Tax Administration Act 1994 do not apply
	Regulations
215	Regulations
216	Transitional regulations [Repealed]
217	Application of Legislation Act 2012 [Repealed]
	Savings and transitional provisions
218	Transitional provisions concerning loan manager and loan advances [Repealed]
219	Early applications and issue of certificates for transition to this Act [Repealed]
220	Application, savings, and transitional provisions
	Consequential amendments and repeals
221	Amendments to this Act [Repealed]
222	Amendments to Student Loan Scheme Act 1992 and Credit Contracts and Consumer Finance Act 2003
223	Amendments to other Acts
224	Amendments to other enactments
225	Student Loan Scheme Act 1992 repealed
226	Regulations revoked
	Schedule 1 Conditions to borrower being treated as being physically in New Zealand
	Schedule 2 Application of PAYE rules for purposes of section 70
	Schedule 3 Adjustments to net income for purposes of section 73, applying from 1 April 2014 for 2014–2015 and later tax years
	Schedule 4 Application of provisional tax rules for purposes of section 86
	Schedule 5 Transitional provisions concerning loan manager and loan advances [Repealed]
	Schedule 6 Application, savings, and transitional provisions
	Schedule 7 Amendments to this Act [Repealed]
	Schedule 8 Amendments to Student Loan Scheme Act 1992 and Credit Contracts and Consumer Finance Act 2003
	Schedule 9 Amendments to other Acts
	Schedule 10 Amendments to other enactments
	Notes

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Student Loan Scheme Act 2011

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