“end-of-year repayment obligation means the repayment obligation of a New Zealand-based borrower for the adjusted net income the borrower derives for a tax year, assessed in accordance with sections 76 and 76A and calculated in accordance with section 77 or 78”.

“interim payment means the amount that a borrower is obliged to pay towards the next tax year's end-of-year repayment obligation in accordance with section 82 or 83 or 83 and section 84 or 85”.

• “(c) an end-of-year repayment obligation:”.

“new borrower, in relation to a tax year, means—

• “(a) a person who becomes a borrower for the first time under the student loan scheme in the period starting on 1 January of the tax year and ending on the close of the last day of the tax year: year; or

• “(b) a person to whom all of the following apply:

  • “(i) the person had been a borrower under the student loan scheme before the tax year; and

  • “(ii) the person fully repaid his or her loan before the start of the tax year; and

  • “(iii) in the period starting on 1 January of the tax year and ending on the close of the last day of the tax year, the person again became a borrower under the student loan scheme

“terminal payment means the amount that a borrower is obliged to pay in relation to an end-of-year repayment obligation in accordance with section 80 and section 81 or 85”.

• “(2) A reference to a borrower estimating his or her end-of-year repayment obligation is a reference to a borrower making a fair and reasonable estimate of his or her end-of-year repayment obligation in accordance with section RC 7 of the Income Tax Act 2007, as applied by section 86 and Schedule 4 of this Act.”

• “(a) a terminal payment:”.

• “(ii) if the Commissioner has determined the instalments that must be paid under section 112(3), 115(1)(d), or 115A, the final date determined by the Commissioner; and”.

“overseas-based instalment default means the sum of the instalments of an overseas-based borrower's repayment obligations for a tax year that must be paid in accordance with subpart 5 of Part 2 subparts 4 and 5 of Part 2.”

“8A Application of provisions of Act

• Schedule 6 contains application, savings, and transitional provisions that affect this Act's other provisions as from time to time amended, repealed, and replaced (see section 220).”

• “(3) See section 193C concerning the obligation on a borrower if there is a change in any of the contact details provided to the Commissioner under this section.”

• “(3) If a borrower derives only income other than salary or wages, subpart 2 applies to that borrower.

• “(4) If a borrower derives income from salary or wages and income other than from salary or wages, subparts 1 and 2 both apply to that borrower.”

“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

• This subpart applies to the following New Zealand-based borrowers, other than new borrowers:

  • “(a) borrowers who derive $1,500 or more of adjusted net income for a tax year and who have income from adjusted net income and salary or wages (if any) for that tax year of $1,500 or more above the annual repayment threshold:

  • “(b) borrowers to whom paragraph (a) does not apply in relation to a tax year and who—

    • “(i) have been required to pay interim payments for that tax year; or

    • “(ii) have been issued a default assessment for an end-of-year repayment obligation under section 106 of the Tax Administration Act 1994 for that tax year.

“73 Meaning of adjusted net income

• “(1) In this Act, adjusted net income means a borrower's income calculated in accordance with the formula—

  a = b − c

  where—

  a

  is the borrower's adjusted net income

  b

  is the borrower's annual gross income other than from salary or wages

  c

  is the borrower's annual total deductions.

  “(2) However, the income and deductions for any investment activity, or for any business, for a tax year are ignored when calculating a borrower's adjusted net income for that tax year if, treating the borrower as having only the income and deductions of that investment activity or of that business, the borrower would have a net loss for that year.

  “(3) For the purposes of applying subsection (2), 2 or more business or investment activities may be treated as a single activity if the Commissioner considers that those business or investment activities are of a kind that are normally carried on in association with each other.

  “(4) For the purposes of applying subsection (2), as modified by subsection (3), deductions that relate to an asset used in carrying on 2 or more business or investment activities must be appropriately apportioned between those activities on the basis of the use of that asset in those activities.

  “(5) Subsections (2) to (4) do not apply to a borrower whose only income for the tax year is from pre-taxed income, or pre-taxed income and salary and wages.

  “(6) In this section,—

  “business has the same meaning as in section YA 1 of the Income Tax Act 2007

  “investment activity has the same meaning as in section MB 3(5) of the Income Tax Act 2007.

“74 Declaration of adjusted net income

• “(1) If this subpart applies to a borrower and the borrower is not required to file a return of his or her income for the tax year or provide details of his or her annual gross income and annual total deductions under section 114, the borrower must make a declaration of the borrower's adjusted net income.

  “(2) The declaration of adjusted net income must be made—

  • “(a) by notifying the Commissioner in a manner acceptable to the Commissioner; and

  • “(b) on or before—

    • “(i) 7 July in the tax year following the tax year in which the adjusted net income was derived; or

    • “(ii) if the borrower has received an extension of time to make the declaration in accordance with section 75, the date on which the borrower is required to make the declaration; or

    • “(iii) if the Commissioner has granted the borrower an extension of time to make the declaration (other than in accordance with section 75), the date on which the borrower is required to make the declaration as specified by the Commissioner.

“75 Extension of time for making declaration of adjusted net income

• A borrower may apply to the Commissioner for an extension of time for the making of a declaration of adjusted net income in accordance with section 37(3) to (5) of the Tax Administration Act 1994, and those subsections apply, as far as applicable and with all necessary modifications, as if—

  • “(a) the reference to ‘the due date required under this section’ were a reference to ‘the due date required under section 74(2)(b)(i) of the Student Loan Scheme Act 2011’; and

  • “(b) every reference to a taxpayer were a reference to a borrower; and

  • “(c) every reference to a return or a return of income were a reference to a declaration of adjusted net income.

“76 Commissioner to assess borrower's end-of-year repayment obligation

• “(1) The Commissioner must assess the amount (if any) of a borrower's end-of-year repayment obligation for a tax year as soon as practicable after the borrower provides—

  • “(a) his or her return of income for that tax year; or

  • “(b) details of his or her annual gross income and annual total deductions under section 114; or

  • “(c) his or her declaration of adjusted net income.

  “(2) In making the assessment, the Commissioner may have regard to—

  • “(a) any document provided under subsection (1):

  • “(b) any other information that the Commissioner considers to be relevant.

  “(3) The assessment must be made in accordance with this subpart and the loan contract.

  “(4) Section 203 applies if there is an inconsistency between this subpart and the loan contract.

  “(5) The Commissioner must, as soon as practicable after making the assessment, notify the borrower in writing of—

  • “(a) the borrower's end-of-year repayment obligation; and

  • “(b) the due dates, if any, on or before which the end-of-year repayment obligation must be paid (see sections 81, 84, and 85); and

  • “(c) the amounts, if any, that must be paid on or before those due dates.

  “Compare: 1992 No 141 s 15

“76A Commissioner must assess borrowers to whom section 72(b) applies as having zero repayment obligation

• If the Commissioner is satisfied that a borrower meets the criteria in section 72(b), the Commissioner must assess the borrower as having a zero repayment obligation zero end-of-year repayment obligation for that tax year.

“77 Calculation of borrower's end-of-year repayment obligation if salary or wages less than annual repayment threshold

• “(1) Subsection (2) applies if, in relation to a tax year,—

  • “(a) this subpart applies to a borrower; and

  • “(b) the gross income that the borrower derived from salary or wages is less than the annual repayment threshold.

  “(2) The borrower's end-of-year repayment obligation for the tax year must be calculated in accordance with the formula—

  a = b × (c − d)

  where—

  a

  is the borrower's end-of-year repayment obligation for the tax year

  b

  is the repayment percentage

  c

  is the income that the borrower derives from adjusted net income and from salary or wages for the tax year

  d

  is the annual repayment threshold.

  “(3) If the borrower's end-of-year repayment obligation for the tax year is zero or less, the borrower has no end-of-year repayment obligation for the tax year.

“78 Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold

• “(1) Subsection (2) applies if, in relation to a tax year,—

  • “(a) this subpart applies to a borrower; and

  • “(b) the gross income that the borrower derived from salary or wages is equal to or more than the annual repayment threshold.

  “(2) The borrower’s end-of-year repayment obligation for the tax year must be calculated in accordance with the formula—

  a = b × c

  where—

  a

  is the borrower’s end-of-year repayment obligation for the tax year

  b

  is the repayment percentage

  c

  is the income that the borrower derives from adjusted net income for the tax year.

“79 Payment of end-of-year repayment obligation

• “(1) A borrower whose end-of-year repayment obligation for a tax year is greater than zero must pay a terminal payment—

  • “(a) calculated in accordance with section 80:

  • “(b) on or before the due date under section 81 or a due date determined by the Commissioner under section 85.

  “(2) Subsection (3) applies to a borrower if—

  • “(a) the borrower's end-of-year repayment obligation for a tax year is $1,000 or more; or

  • “(b) the borrower has not made a declaration of adjusted net income for a tax year, provided a return of income, or provided details of his or her annual gross income and annual gross deductions under section 114 for a tax year, and the amount of the borrower's end-of-year repayment obligation for the immediately preceding tax year was $1,000 or more.

  “(3) A borrower must also pay interim payments for the tax year for the next tax year—

  • “(a) calculated in accordance with section 82 or 83:

  • “(b) on or before the due dates determined in accordance with section 84 or 85.

  “(4) However, a borrower is not liable to make interim payments for a tax year if the borrower's end-of-year repayment obligation for that year is less than $1,000.

“80 Calculation of terminal payment for tax year

• “(1) The amount of a borrower's terminal payment for the tax year must be calculated in accordance with the formula—

  a = (b – c) – (d – c)

  where—

  a

  is the amount of the borrower's terminal payment

  b

  is the borrower's end-of-year repayment obligation for the tax year

  c

  is the amount of the borrower's interim payments for the tax year in accordance with section 82 or 83

  d

  is the sum of any amounts that satisfy (so far as they extend) the borrower's end-of-year repayment obligation for the tax year.

  “(2) However,—

  • “(a) if the sum of (b − c) is less than zero, then it must be treated as if it were zero; and

  • “(b) if the sum of (d − c) is less than zero, then it must be treated as if it were zero.

“81 Due date for terminal payment

• A borrower must pay his or her terminal payment on or before the borrower's terminal tax date, as defined in section YA 1 of the Income Tax Act 2007, for the tax year.

“82 Calculation of interim payments for next tax year

• “(1) The amount of each of the borrower's interim payments for the tax year may vary and must be calculated separately in accordance with the formula—

  a = b × (c ÷ d) − e

  where—

  a

  is the amount of the borrower's interim payment

  b

  is, as applicable,—

  • (i) the amount of the borrower's estimated end-of-year repayment obligation for the tax year; or

  • (ii) the amount of the borrower's uplifted end-of-year repayment obligation for the tax year

  c

  is a number reflecting which of the interim payments for the tax year is being calculated (for example, 2 if the second interim payment for the tax year is being calculated)

  d

  is the total number of interim payment due dates the borrower has for the tax year

  e

  is the aggregate amount of all of the borrower's interim payments for the tax year that were due before the interim payment being calculated.

  “(2) For the purposes of this section, the total number of interim payment due dates a borrower has is determined by reference to the number of interim payments the borrower must make as determined in accordance with section 84 or 85.

  “(3) In this section, uplifted end-of-year repayment obligation—

  • “(a) means—

    • “(i) the amount of the borrower's end-of-year repayment obligation for the immediately preceding tax year multiplied by 105%; or

    • “(ii) if the borrower did not make a declaration of adjusted net income for the immediately preceding tax year, the amount of the borrower's end-of-year repayment obligation for the year before the immediately preceding tax year multiplied by 110%; but

  • “(b) the amount calculated in accordance with paragraph (a) must not exceed the sum of the borrower's loan balance on 1 April of the relevant tax year plus any loan advances made or charged to the borrower for that tax year after that date.

  “(4) For the purposes of subsection 3(b) subsection (3)(b), the borrower's loan balance on 1 April of the relevant tax year must be determined by subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day.

  “Compare: 1992 No 141 s 27

“83 Commissioner may assess interim payments if information for preceding year not provided

• “(1) The Commissioner may assess a borrower's interim payments for a tax year in the manner set out in section RC 6(3) of the Income Tax Act 2007 if, for the immediately preceding tax year, the borrower did not provide—

  • “(a) his or her return of income; or

  • “(b) details of his or her annual gross income and annual total deductions under section 114; or

  • “(c) his or her declaration of adjusted net income under section 74.

  “(2) Section 82 does not apply if the Commissioner makes an assessment in accordance with subsection (1).

“84 Due dates for payment of interim payments

• “(1) A borrower must pay an interim payment for a tax year on or before each of the dates on which the borrower must pay his or her provisional tax for that tax year in accordance with the provisional tax rules.

  “(2) However,—

  • “(a) if a borrower uses a GST ratio to determine his or her provisional tax for a tax year and that year is not a transitional year for the borrower, the due dates for the payment of the borrower's interim payments are the dates in columns B, D, and F of the table in Part A of Schedule 3 of the Income Tax Act 2007 that correspond to the month of the borrower's balance date:

  • “(b) if a borrower uses a GST ratio to determine his or her provisional tax for a tax year and that year is a transitional year for the borrower, the due dates for the payment of the borrower's interim payments are every second date in the table headed ‘GST ratio provisional taxpayers’ in Part B of Schedule 3 of the Income Tax Act 2007 that correspond to the month of the borrower's balance date, except that—

    • “(i) if the borrower has only 1 payment date, the borrower has only 1 due date; and

    • “(ii) if the borrower has an odd number of payment dates, then the last payment date does not apply to the borrower:

  • “(c) if a borrower does not pay provisional tax for a tax year, the due dates for the payment of the borrower's interim payments are the dates in columns B, D, and F of the table in Part A of Schedule 3 of the Income Tax Act 2007 that correspond to the month of the borrower's balance date:

  • “(d) if a borrower pays provisional tax on a 6-monthly basis for the 2012–13 tax year, the due dates for the payment of the borrower's interim payments are the dates in columns B, D, and F of the table in Part A of Schedule 3 of the Income Tax Act 2007 that correspond to the month of the borrower's balance date.

  “(3) In this section, GST ratio and transitional year have the same meanings as in section YA 1 of the Income Tax Act 2007.

“85 Commissioner's powers in relation to due dates

• “(1) The Commissioner may determine the dates on or before which a borrower must pay his or her terminal payment or interim payments for a tax year if—

  • “(a) the borrower requests the Commissioner to determine the borrower's terminal payment due date or interim payment due dates; or

  • “(b) the Commissioner considers it necessary or appropriate in the circumstances.

  “(2) The dates determined by the Commissioner under subsection (1) may differ from the dates specified in section 81 or 84.

  “(3) If the Commissioner determines the dates on or before which a borrower must pay his or her terminal payment or interim payments for a tax year,—

  • “(a) the Commissioner must, as soon as practicable, notify the borrower in writing—

    • “(i) of that fact; and

    • “(ii) of the dates determined by the Commissioner; and

  • “(b) the amount of the terminal payment or the interim payments must be calculated by reference to those dates.

  “(4) This section overrides sections 81 and 84.

  “Compare: 1992 No 141 s 30(2)

“86 Interim payments to be paid in same manner as provisional tax

• Subject to Schedule 4,—

  • “(a) interim payments for a borrower's end-of-year repayment obligation for a tax year are payable in the same manner as provisional tax; and

  • “(b) a borrower must comply with the requirements of the provisional tax rules.

  “Compare: 1992 No 141 s 28

“87 Consequence of failure to meet repayment obligations

• A borrower may be liable to pay late payment interest if the borrower does not meet his or her repayment obligations under this subpart (see section 139(1)).”

• “(1) This section applies to an overseas-based borrower who—

  • “(a) is not or is no longer entitled to a repayment holiday under section 107B or 108A(2); and

  • “(b) has not had his or her overseas-based repayment obligation reassessed under section 115A.”

• “(a) if a borrower was not overseas-based at the start of the tax year, the borrower's consolidated loan balance on the date on which the borrower became overseas-based; and

• “(b) if a borrower was overseas-based at the start of the tax year (year A), the sum determined by—

  • “(i) including the amount of the borrower's consolidated loan balance on 31 March in the year prior to year A (the previous year); and

  • “(ii) including the amount of any annual administration fee charged under section 189 for the previous year; and

  • “(iii) subtracting any 10% bonus the borrower is entitled to under Part 3 for an excess repayment for the previous year.”

• “(a) for the first tax year during a period when section 110 applies to a borrower, the sum determined by—

  • “(i) including the borrower's loan balance on the day on which that section first applies to the borrower in that period; and

  • “(ii) subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day; and”

• “(iv) subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day.”

• “(4) This section—

  • “(a) overrides section 110; and

  • “(b) does not apply to an overseas-based borrower who has had his or her overseas-based repayment obligation reassessed under section 115A.

• “(4) This section overrides section 110.”

• “(5) In this section, loan balance means,—

  • “(a) if a borrower was not overseas-based at the start of the tax year, the sum determined by—

    • “(i) including the borrower's loan balance on the day on which the borrower became overseas-based; and

    • “(ii) subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day; and

  • “(b) if a borrower was overseas-based at the start of the tax year (year A), the sum determined by—

    • “(i) including the amount of the borrower's loan balance on 31 March in the year prior to year A (the previous year); and

    • “(ii) including the amount of any annual administration fee charged under section 189 for the previous year; and

    • “(iii) subtracting any 10% bonus the borrower is entitled to under Part 3 for an excess repayment for the previous year; and

    • “(iv) subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day.”

• “(3) However, the Commissioner may determine the dates on or before which a borrower must pay instalments of his or her overseas-based repayment obligations, and the amount of those instalments, if the Commissioner considers it necessary or appropriate in the circumstances.

• “(4) If the Commissioner makes a determination under subsection (3), the Commissioner must, as soon as practicable, notify the borrower in writing—

  • “(a) of that fact; and

  • “(b) of the dates and the amounts determined by the Commissioner.”

• “(a) a declaration of adjusted net income; or”.

“115A Reassessment of borrower's overseas-based repayment obligations in year of return to New Zealand

• “(1) The Commissioner may reassess a borrower's overseas-based repayment obligation if the borrower notifies the Commissioner—

  • “(a) that the borrower has returned to New Zealand; and

  • “(b) that he or she intends to become New Zealand-based; and

  • “(c) of the specific date from which he or she expects to become New Zealand-based.

  “(2) The borrower must notify the Commissioner of any other information that the Commissioner may reasonably require for the purposes of either or both of the following:

  • “(a) establishing any of the matters in subsection (1):

  • “(b) the reassessment.

  “(3) If the Commissioner reassesses a borrower's overseas-based repayment obligation under this section,—

  • “(a) the reassessment must be made in accordance with section 115, as if the borrower were New Zealand-based from the date notified by the borrower under subsection (1)(c); and

  • “(b) section 109(6) and (7) apply to the reassessment as if it were an assessment under that section.

  “(4) Despite the reassessment of a borrower's overseas-based repayment obligation under this section, the borrower continues to be treated as an overseas-based borrower for all other purposes (for example, interest continues to be calculated in accordance with the borrower's overseas-based status) until the borrower becomes New Zealand-based.

  “(5) The Commissioner may review a reassessment of a borrower's overseas-based repayment obligation made under this section if—

  • “(a) the borrower does not become New Zealand-based; or

  • “(b) the borrower becomes New Zealand-based from a date that is different from the expected date notified to the Commissioner under subsection (1)(c).”

• “(1) Subsection (2) applies if subpart 2 of Part 2 applies to a borrower and—

  • “(a) an excess repayment is made for the borrower; or

  • “(b) upon investigation by the Commissioner of the borrower's repayment obligation for a prior tax year, the Commissioner is satisfied that—

    • “(i) the repayment obligation assessed by the Commissioner is incorrect; and

    • “(ii) as a result, an excess repayment has been made.”

• “(2) To exercise a choice under subsection (1), the borrower must notify the Commissioner in a manner acceptable to the Commissioner within 6 months after whichever is the latest of the following:

  • “(a) the date on which the borrower was notified of the excess repayment in accordance with section 120:

  • “(b) the day after the end of the tax year to which the excess repayment relates:

  • “(c) the day after the due date of the final instalment of the borrower's overseas-based repayment obligation.”

• “(3) If a tax year includes an extra day because of a leap year, the reference to 365 in the formula in subsection (2) must be treated as if it were a reference to 366.”

• “(a) under subsection (1)(c) is written off:”.

• “(5) In this section, declaration means a declaration of adjusted net income.”

“160 Notification and payment obligations if Commissioner imposes student loan shortfall penalty

• “(1) This section applies if the Commissioner imposes a student loan shortfall penalty on a borrower.

  “(2) The Commissioner must notify the borrower in writing of—

  • “(a) the amount of the student loan shortfall penalty and the reasons for its imposition; and

  • “(b) the date on or before which the student loan shortfall penalty must be paid (which must be at least 30 days after the date of the notification).

  “(3) The Commissioner must also notify the borrower in writing of the amount of the repayment obligation shortfall that remains due and payable and that that amount is subject to late payment interest.

  “(4) The Commissioner may notify the borrower of the information required under subsection (2) and the information required under subsection (3) in 2 separate notices.

  “(5) The borrower must pay the student loan shortfall penalty on or before the date specified in the notice given under subsection (2).”

“Rights to challenge and challenge procedures”.

“174A Part 8A of Tax Administration Act 1994 applies to challenges under this Act

• The procedures under Part 8A of the Tax Administration Act 1994 apply, with all necessary modifications, to a challenge of a matter under this Act.”

“182A Challenge to decision concerning repayment holiday

• A borrower may challenge a decision by the Commissioner under section 107B not to grant the borrower a repayment holiday, on the ground that the decision is not fair and reasonable.”

• “(3A) For the purposes of subsections (1) and (2), the amount of the borrower's loan balance on the day referred to in each of those provisions must be determined by subtracting the amount of any repayment obligation or other amount that the Commissioner has, on or before that day, required the borrower to pay and that is payable on or after that day.”

“193C Changes relating to contact details of borrower

• If there is a change in any of the borrower's contact details, the borrower must promptly notify the Commissioner of the changed details.”

• “(1) The purpose of this section is to facilitate the exchange of information between the Inland Revenue Department and the New Zealand Customs Service for the purpose of establishing an information-matching programme to assist the Commissioner to—

  • “(a) verify whether borrowers are New Zealand-based or overseas-based; and

  • “(b) verify whether borrowers are New Zealand residents; and

  • “(c) locate, when they enter or leave New Zealand, borrowers who are in serious default (within the meaning of section 280G of the Customs and Excise Act 1996) in relation to student loans.”

• “(d) specifying further information requirements in accordance with sections 10(2)(d), 13(i), 16(2)(a)(viii), 16A(1)(e) or 107A(2)(e):”.

“220 Application, savings, and transitional provisions

• “(1) The application, savings, and transitional provisions set out in Schedule 6 have effect for the purposes of this Act.

  “(2) The application, savings, and transitional provisions relating to this Act and the amendment Acts specified in the first column of the following table are set out in the Parts of Schedule 6 specified in the second column of the table:

  Principal Act and Amendment Acts	Part of Schedule 6
  Principal Act
  Principal Act as enacted	Part 1
  Amendment Acts
  Provisions relating to Student Loan Scheme Amendment Act (No 2) 2012	Part 2

Schedule 6 Application, savings, and transitional provisions

ss 8A, 220

Part 1
Provisions relating to principal Act as enacted

Savings provisions

“2A Commissioner must not collect amount assessed as repayment obligation of certain borrowers for 2011-2012 tax year

• “(1) The purpose of this clause is to ensure that the substantive effect of the provisions of the Student Loan Scheme Act 2011 (Transitional Provisions) Regulations 2012 continues, including beyond 1 April 2015, in respect of borrowers to whom those regulations applied before they were revoked by section 49A of the Student Loan Scheme Amendment Act (No 2) 2012.

  “(2) This clause applies if—

  • “(a) a person became a borrower under the student loan scheme for the first time in the period starting on 1 January 2012 and ending on the close of 31 March 2012; or

  • “(b) a person is a person to whom all of the following apply:

    • “(i) the person had been a borrower under the student loan scheme before the 2011–2012 tax year; and

    • “(ii) the person fully repaid his or her loan before the start of the 2011–2012 tax year; and

    • “(iii) the person again became a borrower under the student loan scheme in the period starting on 1 January 2012 and ending on the close of 31 March 2012.

  “(3) Despite clause 2, any other provision of this Act, and anything in the Student Loan Scheme Act 1992,—

  • “(a) the Commissioner must refrain from collecting the amount that the Commissioner assesses, under section 15 of the Student Loan Scheme Act 1992, as the borrower's repayment obligation for the 2011-2012 tax year; and

  • “(b) the amount that the Commissioner refrains from collecting under paragraph (a) is not written off and remains part of the borrower's loan balance.”

• “(1) Any amount that the Commissioner has refrained from collecting from the borrower in accordance with section 51(3) of the Student Loan Scheme Act 1992 and that remains unpaid on the close of 31 March 2012 is added to a borrower's loan balance under this Act.”

• “(1) This clause applies if—

  • “(a) a borrower—

    • “(i) has entered into an instalment arrangement with the Commissioner on or before 31 March 2012 in relation to an amount (the instalment amount) that must be paid under the Student Loan Scheme Act 1992; and

    • “(ii) some of the payments that are required under the instalment arrangement must be paid on or after 1 April 2012; or

  • “(b) a borrower—

    • “(i) has entered into an instalment arrangement with the Commissioner under this Act between 1 April 2012 and 31 March 2013 (inclusive) in relation to an amount (the instalment amount) that must be paid under this Act; and

    • “(ii) some of the payments that are required under the instalment arrangement must be paid on or after 1 April 2013.”

“Part 2
“Transitional provision relating to Student Loan Scheme Amendment Act (No 2) 2012”.

“16 Interpretation

• In this Part,—

  “amendment Act means the Student Loan Scheme Amendment Act (No 2) 2012

  “principal Act means the Student Loan Scheme Act 2011.

“17 Regulations for transitional purposes

• “(1) In this clause, transition means the transition to the changes made by the amendment Act.

  “(2) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations prescribing transitional provisions for the purpose of facilitating or ensuring an orderly transition.

  “(3) Regulations made under this clause may—

  • “(a) provide that, subject to such conditions as may be specified in the regulations, 1 or more provisions (including definitions) of the amendment Act do not apply, or apply with modifications or additions:

  • “(b) provide that, subject to such conditions as may be specified in the regulations, 1 or more provisions repealed, amended, or revoked by the amendment Act are to continue to apply, or apply with modifications or additions, as if they had not been repealed, amended, or revoked:

  • “(c) provide for any other matter necessary to facilitate or ensure an orderly transition.

  “(4) The Minister must not recommend the making of regulations unless the Minister is satisfied that the regulations—

  • “(a) are reasonably necessary for the purpose of facilitating or ensuring an orderly transition; and

  • “(b) are consistent with the purposes of the principal Act.

  “(5) Regulations made under this clause must include a date on which the regulations are revoked, and that date must be no later than 3 years after the date on which they are made.

  “(6) This clause is repealed on the close of 1 April 2017.

  “(7) To avoid doubt, if any regulations made under this clause include a revocation date that is later than 1 April 2017 (but no later than 3 years after the date on which they are made), the regulations continue in force until the revocation date included in the regulations, unless earlier revoked, despite the repeal of this clause by subclause (6).

  “(5) Regulations made under this clause must include a date on which the regulations are revoked, and that date must be the earlier of—

  • “(a) 3 years after the date on which they are made; and

  • “(b) the close of 31 March 2018.

  “(6) This clause is repealed on 1 April 2018.”

“serious default means the state of having an unpaid amount due and owing under the Student Loan Scheme Act 2011 and satisfying criteria established in a manner to be determined by the Commissioner

“unpaid amount has the meaning given to it by section 5 of the Student Loan Scheme Act 2011.”

• “(1) The purpose of this section is to facilitate the exchange of information between the Customs and the Department for the purposes of assisting the Commissioner to—

  • “(a) verify whether borrowers are New Zealand-based or overseas-based for the purposes of the Student Loan Scheme Act 2011:

  • “(b) verify whether borrowers are New Zealand residents for the purposes of that Act:

  • “(c) locate, when they enter or leave New Zealand, borrowers who are in serious default in relation to a student loan.”

• “(e) information provided by the borrower when arriving in or, as the case may be, departing from New Zealand.”

• “(1) The purpose of this section is to facilitate the Department's access to information stored in a database for the purpose of assisting the Commissioner to—

  • “(a) verify whether borrowers are New Zealand-based or overseas-based for the purposes of the Student Loan Scheme Act 2011:

  • “(b) verify whether borrowers are New Zealand residents for the purposes of that Act:

  • “(c) verify whether borrowers are in New Zealand for the purposes of that Act:

  • “(d) locate, when they enter or leave New Zealand, borrowers who are in serious default in relation to a student loan.”

• “(1C) Nothing in subsection (1) prevents the Commissioner of Inland Revenue from immediately taking action to recover amounts relating to—

  • “(a) unpaid amounts owed to the Commissioner by an individual who is in serious default identified in information supplied to the Commissioner under section 280H of the Customs and Excise Act 1996; or

  • “(b) financial support under the Child Support Act 1991 owed to the Commissioner by an individual who is identified in information supplied to the Commissioner under section 280K or 280L of the Customs and Excise Act 1996.”

• “(b) any unpaid amount”.

• “(iva) an underestimation penalty; and”.

• “(c) any amount that must be paid by a borrower in accordance with a written notification under section 52:

• “(d) end-of-year repayment obligation:”.

“underestimation penalty means a penalty that a borrower is liable to pay under section 161A”.

• “(f) an amount that must be paid by a borrower in accordance with a written notification under section 52:

• “(g) a late filing penalty:

• “(h) a student loan shortfall penalty:

• “(i) an underestimation penalty.”

“119 Meaning of excess repayment

• “(1) An excess repayment, in relation to a borrower and a tax year, is any amount paid or deducted in relation to the borrower's consolidated loan balance for the tax year that is in excess of the total of—

  • “(a) all repayment obligations of the borrower for the tax year; and

  • “(b) all penalties charged to the borrower for the tax year; and

  • “(c) the borrower's unpaid amounts.

  “(2) In determining whether an excess repayment has been made, the Commissioner must—

  • “(a) disregard any standard deduction (other than a significant over-deduction) or Commissioner deductions for the purposes set out in section 49(1)(a); and

  • “(b) disregard a salary or wage deduction or a payment made to the Commissioner that is subsequently refunded; and

  • “(c) treat a borrower's repayment obligation as if any relief granted under section 147 had not been granted; and

  • “(d) disregard any fee refunded by an education provider to the loan manager or the Commissioner.”

• “(3) In this section, late payment interest rate means the base interest rate plus 4%, calculated as an equivalent monthly rate expressed as a percentage and truncated to 3 decimal places.”

“141 Late payment interest reduced if instalment arrangement complied with

• “(1) This section applies if—

  • “(a) a borrower is liable to pay late payment interest on an unpaid amount under section 139; and

  • “(b) the borrower has entered into an instalment arrangement in relation to the unpaid amount in accordance with section 154.

  “(2) For each month that the borrower meets his or her obligations under the instalment arrangement, any late payment interest that the borrower is liable to pay on the unpaid amount for that month must be calculated as if, in the definition of late payment interest rate in section 139(3), the reference to base interest rate plus 4% were a reference to base interest rate plus 2%.

  “(3) However, subsection (2) applies only to the days in a month during which an instalment arrangement applies.”

• “(ab) relief from a penalty (see section 146A):”.

“146 Commissioner may grant relief from late payment interest

• “(1) Subsection (2) applies—

  • “(a) if a borrower has been charged with late payment interest; and

  • “(b) regardless of whether that late payment interest has been paid, either in whole or in part; and

  • “(c) if an application is made under section 145(1)(a) for relief from late payment interest.

  “(2) The Commissioner may, having regard to the circumstances of the case and if the Commissioner considers it equitable to do so, grant relief to the borrower by cancelling as much of the late payment interest as the Commissioner considers equitable.

  “(3) If late payment interest is cancelled,—

  • “(a) the borrower's consolidated loan balance is decreased by the amount of the cancelled late payment interest; and

  • “(b) if the late payment interest has been added to the borrower's unpaid amount under section 141(2) under section 139 (whether calculated at the full late payment interest rate in accordance with section 139(2) or the reduced late payment interest rate in accordance with section 141), the borrower's unpaid amount is decreased by the amount of the cancelled late payment interest; and

  • “(c) any payment made in excess of the remaining amount of late payment interest payable (if any) by the borrower (an excess payment) must be offset against the borrower's consolidated loan balance as follows:

    • “(i) first, against any unpaid amount; and

    • “(ii) secondly, against the loan balance; and

  • “(d) the Commissioner must refund any remaining excess payment to the borrower (see sections 199 and 200).

  “Compare: 1992 No 141 s 53”.

“Relief from penalties

“146A Commissioner may grant relief from penalties

• “(1) Subsection (2) applies—

  • “(a) if a borrower has been charged with a penalty; and

  • “(b) regardless of whether that penalty has been paid, either in whole or in part; and

  • “(c) if an application is made under section 145(1)(ab).

  “(2) The Commissioner may, having regard to the circumstances of the case and if the Commissioner considers it equitable to do so, grant relief to the borrower by cancelling as much of the penalty as the Commissioner considers equitable.

  “(3) For the purposes of this section, penalty—

  • “(a) means—

    • “(i) a late filing penalty:

    • “(ii) an underestimation penalty:

    • “(iii) a student loan shortfall penalty; but

  • “(b) despite paragraph (a)(iii), does not include a student loan shortfall penalty where, for the purposes of the application of section 159 (as set out in section 158), the shortfall penalty for which the borrower was liable was imposed under section 141D or 141E of the Tax Administration Act 1994.”

• “(2) However, the Commissioner must not—

  • “(a) refund any amount that was deducted or paid to meet a repayment obligation for a tax year prior to the current tax year other than the tax year that immediately precedes the current tax year; or

  • “(b) decrease a repayment obligation if—

    • “(i) a student loan shortfall penalty has been imposed on a borrower under section 159 in relation to the tax year that the repayment obligation relates to; and

    • “(ii) for the purposes of the application of section 159 (as set out in section 158), the shortfall penalty for which the borrower was liable was imposed under section 141D or 141E of the Tax Administration Act 1994.”

b

is the amount of the repayment obligation shortfall (treating any relief granted under section 147 as if it had not been granted)

“Underestimation penalty

“161A Underestimation penalty where interim payments underestimated as at terminal payment date last interim payment date

• “(1) A borrower is liable to pay an underestimation penalty if the borrower has estimated his or her end-of-year repayment obligation in respect of a tax year and, on the due date for the borrower's last interim payment for the tax year,—

  • “(a) the estimate applying is less than 80% of the borrower's end-of-year repayment obligation and is less than the borrower's end-of-year repayment obligation would borrower's total interim payments would have been had the borrower not estimated; and

  • “(b) the amount of the interim payments made on or before the due date for the borrower's last interim payment is less than 80% of the borrower's end-of-year repayment obligation for the year.

  “(2) The amount of the underestimation penalty is calculated in accordance with the formula—

  a = (b − c) × 10%

  where—

  a

  is the amount of the underestimation penalty

  b

  is the borrower's end-of-year repayment obligation for the tax year

  c

  is the greater of—

  • (i) the amount of the borrower's estimate, applying at the due date for payment of the last interim payment; and

  • (ii) the amount of the interim payments paid on or before the due date for payment of last interim payment.

  “(3) A penalty imposed under this section is payable on or before the borrower's due date for payment of his or her terminal payment under section 81 or 85.”

• “(2) The following must not be used to satisfy other repayment obligations, unpaid amounts, or penalties:

  • “(a) a standard deduction that is not a significant over-deduction:

  • “(b) a Commissioner deduction for the purposes of section 49(1)(a) that does not exceed the total amount specified under section 49(2)(b).”

“197 Write-off of consolidated loan balance

• “(1) A borrower's consolidated loan balance must be reduced to zero if—

  • “(a) the borrower dies; or

  • “(b) the Commissioner has reasonable grounds for believing that the borrower has died.

  “(2) The Commissioner may reduce a borrower's consolidated loan balance to zero if that balance is less than $20.

  “(3) Subsection (1)(a) has effect from the day on which the borrower died.

  “(4) Subsection (1)(b) has effect from the day on which the borrower is believed to have died.

  “(5) Subsection (2) has effect from the day on which the Commissioner exercises his or her discretion to reduce the consolidated loan balance to zero.

  “(6) If a borrower's consolidated loan balance is reduced to zero under subsection (1)(a) or (2), that action may not be reversed.

  “(7) Subsection (6) applies despite anything to the contrary.

  “Compare: 1992 No 141 s 60”.

“73 Meaning of adjusted net income

• In this Act, adjusted net income means net income, as defined in section YA 1 of the Income Tax Act 2007, with the adjustments set out in Schedule 3 of this Act (including any adjustment determined by the Commissioner under clause 15 of that schedule) and excluding salary or wages.”