(1) Subject to section 12, the loan manager shall, in the administration of the student loan scheme, transfer each borrower's loan balance to the Commissioner for collection.

(2) Every such transfer shall be effected in accordance with this Act and, unless the Commissioner otherwise requests, after the end of each loan year.

(1) The loan manager shall, before transferring a borrower's loan balance to the Commissioner for collection, give to the borrower a notice—

• (a) stating that the loan manager is proposing to transfer the borrower's loan balance to the Commissioner for collection; and

• (b) giving the date at which it is proposed that the transfer take effect; and

• (c) specifying the amount of the borrower's loan balance and the date as at which it is calculated; and

• (d) notifying the borrower of the rights of objection conferred on the borrower by sections 6 and 8.

(2) Where the loan balance is calculated as at 31 December in any year,—

• (a) the notice required by subsection (1) shall be given to the borrower not later than 25 January in the following year; and

• (b) the date on which it is proposed that the transfer take effect shall not be earlier than 28 February in the following year.

(3) Where the loan balance is calculated as at a date other than 31 December in any year, the notice required by subsection (1) shall be given to the borrower at least 1 month before the date on which it is proposed that the transfer take effect.

(1) Where a notice stating that the loan manager is proposing to transfer a borrower's loan balance to the Commissioner for collection is given to the borrower under section 5, the borrower may object to the statement of the loan balance by delivering or posting to the loan manager a written notice of objection stating the grounds of that person's objection.

(2) If the loan balance is calculated as at 31 December in any year, notice of objection under subsection (1) shall, subject to section 10, be delivered or posted to the loan manager not later than 25 February in the following year.

(3) If the loan balance is calculated as at a date other than 31 December in any year, notice of objection under subsection (1) shall, subject to section 10, be delivered or posted to the loan manager not later than the date specified for that purpose in the notice (which date shall be not later than 1 month after the date on which the notice under section 5 is given to the borrower).

(1) The loan manager shall consider every objection made under section 6(1), and may alter the statement of the loan balance accordingly.

(2) The loan manager shall, as soon as practicable, give notice in writing to the objector of the loan manager's decision in respect of the objection, and of the reasons for that decision.

(1) If an objection under section 6(1) is not wholly allowed by the loan manager, the objector may, by delivering or posting a written notice to the chief executive, require that the objection be determined by the chief executive.

(2) Subject to section 10, the notice under subsection (1) shall be delivered or posted to the chief executive within 21 days after the date on which the notice of disallowance is given to the objector by or on behalf of the loan manager.

(1) The chief executive shall consider every objection made under section 6(1) that he or she is required to determine under section 8, and may alter the statement of the loan balance accordingly.

(2) The chief executive shall, as soon as practicable, give notice in writing to the objector of the chief executive's decision in respect of the objection, and of the reasons for that decision.

The chief executive may extend—

• (a) the time allowed under section 6(2) or section 6(3) for delivering or posting a notice of objection under section 6(1); or

• (b) the time allowed under section 8(2) for delivering or posting a notice of objection under section 8(1); or

• (c) both.

(1) If an objection under section 6(1) that the chief executive is required to determine under section 8 is not wholly allowed by the chief executive, the objector may, within 30 days after the date on which the notice of the disallowance is given to the objector by or on behalf of the chief executive, either—

• (a) apply to a Disputes Tribunal for determination of the dispute if the amount in dispute is within the financial jurisdiction of the Disputes Tribunal; or

• (b) apply to a District Court for determination of the dispute.

(2) A Referee of a Disputes Tribunal or a District Court Judge, as the case may be, may extend the time allowed under subsection (1) for applying to a Disputes Tribunal or District Court.

(3) Notwithstanding anything in the Disputes Tribunals Act 1988 or the District Courts Act 1947, but subject to subsection (1), no objection to which section 6(1) or section 8(1) applies shall be heard and determined by a Disputes Tribunal or a District Court.

Notwithstanding section 4 or any provision of the loan contract, no loan balance shall be transferred to the Commissioner for collection until any outstanding objection under section 6(1) or section 8(1) and any outstanding application under section 11(1) in relation to that loan balance has been finally determined.

(1) As soon as practicable after a loan balance is transferred to the Commissioner for collection, the Commissioner shall give notice in writing to the borrower of the total amount outstanding under the loan (which notice shall specify the net amount of principal and the net amount of interest transferred).

(2) The borrower shall be liable to repay that total amount in accordance with this Act and the loan contract.

(1) The repayment obligation of each New Zealand based borrower in respect of a tax year shall be the amount by which the borrower's net income for the tax year exceeds the repayment threshold multiplied by the repayment percentage.

(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.

(1) This section applies to borrowers who, for the purposes of this Act, are New Zealand based but are not resident.

(2) For each tax year and each part tax year in respect of which this section applies to a borrower, that borrower must furnish to the Commissioner details of all amounts of that borrower's gross income that are not treated as having a source in New Zealand under section YD 4 of the Income Tax Act 2007.

(3) The borrower must furnish the information to the Commissioner at the time when the borrower would have furnished his or her return of income for a tax year under the Tax Administration Act 1994 if he or she was resident.

(4) The Commissioner may require the borrower to provide evidence of that borrower's gross income.

(1) The Commissioner must make an assessment of the amount, if any, of a borrower's repayment obligation for a tax year as soon as practicable after the end of the tax year.

(2) The assessment shall be made in accordance with the loan contract and this Act.

(3) In making an assessment under this section, the Commissioner may have regard to—

• (a) a return of income furnished under the Tax Administration Act 1994; or

• (b) the sum of all amounts of gross income included in that income statement in the case of a borrower who has received an income statement; or

• (c) the sum of all amounts of gross income known to the Commissioner for a borrower not required to furnish a return of income or receive an income statement under the Tax Administration Act 1994; or

• (d) the details of all amounts of a borrower's gross income provided to the Commissioner under section 14A.

(4) The Commissioner shall, as soon as practicable after making any such assessment, give notice to the borrower of the amount assessed.

(5) In this section, income statement has the same meaning as in section YA 1 of the Income Tax Act 2007.

Sections 21, 33, 34, 36 to 39, 41 to 44, 63, 79, 80, 92, 92A, 106 to 111, 113, and 114 of the Tax Administration Act 1994 and section LC 10 and paragraph (b) of the definition of basic tax rate in section YA 1 of the Income Tax Act 2007 shall, as far as applicable and with all necessary modifications, apply for the purposes of this Act as if—

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

• (b) every reference to the assessment and levy of income tax or tax were a reference to the assessment and levy of a repayment obligation; and

• (c) every reference to income tax were a reference to a repayment obligation.

(1) Sections 17B to 25 apply to any borrower—

• (a) who reasonably expects that his or her gross income from salary or wages that are primary employment earnings for any tax year will exceed the repayment threshold for that tax year; or

• (b) who is issued with a special repayment deduction rate certificate under section 21.

(2) Earnings from employment—

• (a) [Repealed]

• (b) [Repealed]

• (c) as a casual agricultural worker; or

• (d) as an election day worker,—

(as those terms are defined in section YA 1 of the Income Tax Act 2007) shall not be taken into account under subsection (1)(a).

For the purpose of the application of the PAYE rules of the Income Tax Act 2007 under section 25 of this Act, the repayment code of any borrower in relation to any salary or wages is “SL”.

(1) A person who is a borrower and is in the employment of an employer (including an employer from whom secondary employment earnings are received) must give written notice under this section to the employer as soon as practicable after the later of—

• (a) the time at which the person becomes an employee of the employer; and

• (b) the time at which the person becomes a borrower.

(2) A notice under this section must inform the employer that—

• (a) the borrower is required to have repayment deductions made under this Part from any amount paid to the borrower by way of salary or wages; and

• (b) the tax code prescribed by section 24B(3) of the Tax Administration Act 1994 for the borrower should be followed by the repayment code “SL” for the purpose of making a repayment deduction from salary or wages paid to the borrower.

(1) If a borrower has given a notice under section 18, or the Commissioner has given a notice under section 20A, to an employer, each time the employer, or a person acting as a PAYE intermediary for the employer, pays an amount to the borrower by way of salary or wages for an tax year, the employer or the person must make a deduction from that amount.

(2) The deduction shall be made at the standard deduction rate or, if the employer is aware that a special deduction rate or an increased repayment deduction rate applies, at that rate.

(3) The repayment deductions made under this section shall be in addition to any tax deductions required to be made under the PAYE rules of the Income Tax Act 2007.

(1) The standard deduction rate shall be the rate of 10 cents in each complete dollar from—

• (a) so much of the primary employment earnings paid to the borrower as exceeds the proportional repayment threshold; and

• (b) any secondary employment earnings paid to the borrower; and

• (c) any extra emolument paid to the borrower.

(2) For the purposes of this section, the proportional repayment threshold means,—

• (a) where the salary or wages is paid weekly, an amount equal to one fifty-second of the repayment threshold; and

• (b) where the salary or wages is paid fortnightly, twice the amount specified in paragraph (a); and

• (c) where the salary or wages is paid three-weekly, 3 times the amount specified in paragraph (a); and

• (d) where the salary or wages is paid four-weekly, 4 times the amount specified in paragraph (a); and

• (e) where the salary or wages is paid monthly, the amount specified in paragraph (a) multiplied by 13 and divided by 3.

(3) If the repayment percentage is changed by regulations made under section 87, the standard deduction rate shall change accordingly.

(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.

(1) If a borrower wishes to vary the standard deduction rate, the borrower may apply by notice in writing to the Commissioner for the issue of a special repayment deduction rate certificate that takes into account the greater of—

• (a) the borrower's estimated repayment obligation for the tax year; or

• (b) some other amount required by the borrower.

(2) Any borrower who has been issued with a special tax code certificate under section 24F of the Tax Administration Act 1994 and whose net income for the tax year will exceed the repayment threshold shall be deemed to have made such an application.

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

(1) If any question is raised as to the amount, if any, of any repayment deduction that ought to be made from any salary or wages, or any part thereof, it shall, subject to any regulations made for the purposes of this Part, be determined by the Commissioner.

(2) As soon as practicable after making any such determination, the Commissioner shall make an assessment of any repayment deductions so determined.

Notwithstanding section 20, where a repayment deduction is required to be made under this Part from an income-tested benefit, the repayment deduction shall be of such amount as the Commissioner determines in consultation with the chief executive.

(1) Every employer or PAYE intermediary who makes a repayment deduction under this Part from the salary or wages of an employee for any period shall supply the Commissioner with such information, and in such manner, as the Commissioner may reasonably require in order to establish the amount of that repayment deduction.

(2) The information required pursuant to subsection (1) shall be given in such manner as the Commissioner may reasonably require.

(1) Subject to this section, the PAYE rules as defined in section YA 1 of the Income Tax Act 2007 shall, as far as applicable and with the necessary modifications, apply as if—

• (a) every reference to income tax were a reference to a borrower's repayment obligation; and

• (b) every reference to withholding or deducting an amount of tax were a reference to repayment deductions; and

• (c) every reference to a tax code were a reference to a repayment code,—

and every employer, PAYE intermediary, and employee shall comply with the requirements of the PAYE rules of the Income Tax Act 2007 to the extent to which those rules apply by virtue of this section.

(2) Notwithstanding subsection (1), sections BC 1, LD 1(2) and (3), RC 2(1), RC 6, RC 7, RC 16, and RC 17 of the Income Tax Act 2007 shall not apply to any amount required to be deducted under this Part.

(3) Any repayment deduction made under this Part shall not be treated as part of or included in any tax deduction made under the PAYE rules of the Income Tax Act 2007 on account of income tax.

(1) Sections 27 and 28 apply to any borrower whose residual repayment obligation in relation to any tax year is $1,000 or more for that tax year.

(2) The term residual repayment obligation means the amount by which the borrower's repayment obligation for any tax year exceeds any repayment deductions made for that tax year.

(3) Every borrower to whom this section applies shall be a periodic payer who is obliged to make interim repayments towards the repayment obligation for the tax year in accordance with sections 27 and 28.

(4) Notwithstanding subsections (1) to (3), a periodic payer shall have no liability to make interim repayments in respect of the net income for any tax year where that payer was not liable to pay a residual repayment obligation exceeding the sum of $1,000 for the immediately preceding tax year.

(1) The amount payable by a periodic payer by way of interim payments in respect of the net income for any tax year shall be, subject to subsection (2), an amount equal to 105% of the amount of the payer's residual repayment obligation for the immediately preceding tax year.

(2) The amount payable under subsection (1), may be varied in accordance with this Act and the provisions of the Income Tax Act 2007 (as applied by section 28).

(1) Subject to this section, interim repayments shall be payable in the same manner as provisional tax.

(2) The provisional tax rules of the Income Tax Act 2007 and of the Tax Administration Act 1994 shall, as far as applicable and with all necessary modifications, apply as if—

• (a) every reference to provisional tax were a reference to the amount of interim repayments payable by a periodic payer; and

• (b) every reference to a provisional taxpayer or a person liable to pay provisional tax were a reference to a periodic payer; and

• (c) every reference to residual income tax were a reference to the amount of residual repayment obligation; and

• (d) every reference to income tax were a reference to the repayment obligation,—

and every periodic payer shall comply with the requirements of that Part to the extent to which the Part applies by virtue of this section.

(3) Notwithstanding subsection (1),—

• (a) sections RC 3 and RC 5(2) of the Income Tax Act 2007 and section LB 2 of that Act (which provides that provisional tax is to be credited against a taxpayer's income tax liability) shall not apply to any amount of interim repayments; and

• (b) section RC 5(3) of the Income Tax Act 2007 (which relates to amounts of instalments where return not furnished)—

  • (i) shall apply only where the periodic payer's residual repayment obligation for the second preceding tax year exceeds $1,000; and

  • (ii) shall apply as if, where the return for the immediately preceding tax year, or an estimate of the residual repayment obligation, is not furnished by the due date for payment of the third instalment, the periodic payer is deemed to have furnished a statement showing an estimate of the residual repayment obligation for that tax year equal to the amount of any interim repayments paid by the periodic payer on or before that date; and

• (c) section RC 8 of the Income Tax Act 2007 (under which a provisional taxpayer may use the GST ratio method to determine an amount of provisional tax payable) shall not apply to any amount of interim payments; and

• (d) section RC 9(4)(a)(i) and (ii) and (b)(i) of the Income Tax Act 2007 (which provide for exceptions to the requirements of section RC 9(3) of that Act) shall not apply to any amount of interim payments; and

• (e) section RC 9(5) of the Income Tax Act 2007 (which provides for payments of provisional tax by a provisional taxpayer who pays GST on a 6-monthly basis) shall not apply to any amount of interim payments; and

• (f) sections RC 11, RC 16 to RC 19, RC 24, and RC 31 of the Income Tax Act 2007 (which provide for the use by a provisional taxpayer of the GST ratio method) shall not apply to any amount of interim payments.

(1) Section 30 applies to any borrower whose repayment obligation in respect of any tax year exceeds the sum of—

• (a) any repayment deductions credited against the repayment obligation for the tax year; and

• (b) any interim repayments credited against the repayment obligation for the tax year; and

• (c) any voluntary payments made to the Commissioner and credited against the repayment obligation for the tax year.

(2) The amount by which the borrower's repayment obligation exceeds the sum of those amounts for any tax year is referred to as the borrower's terminal repayment obligation.

(1) A terminal repayment obligation for a tax year that is not previously due and payable is due and payable on the borrower's terminal tax date, as defined in section YA 1 of the Income Tax Act 2007, for the tax year.

(2) Notwithstanding subsection (1), where an assessment is not made until after the due date of the terminal repayment obligation, or is increased after the due date of the terminal repayment obligation, the Commissioner may, having regard to the circumstances of the case and if the Commissioner thinks it equitable to do so, fix a new date for the payment of the terminal repayment obligation, or part thereof, or of the increase, as the case may be, and the date so fixed shall be deemed to be the due date for the purposes of this Part.

In this Part, unless the context otherwise requires,—

(1) A borrower who becomes overseas based after 1 April 2007 is entitled to a repayment holiday for a maximum period of 3 years.

(2) A borrower is only entitled to a repayment holiday for periods when the borrower is overseas based.

(3) A repayment holiday may consist of 1 or more periods of time when a borrower is overseas based, but in total those periods must be for 3 years or less.

(4) If a borrower is, at any time, overseas based after that borrower's 3-year repayment holiday has ended, that borrower's repayment obligation must be calculated in accordance with section 34.

(5) Any 1 borrower is only entitled to receive 1 3-year repayment holiday.

(1) A borrower may, by giving notice to the Commissioner, choose not to have a repayment holiday for any period during which that borrower is overseas based.

(2) A borrower may have 1 or more opt-out periods.

(3) An opt-out period may begin from a date prior to the date on which a borrower gives notice to the Commissioner under subsection (1).

(4) An opt-out period ends if a borrower becomes New Zealand based.

(5) A repayment holiday—

• (a) ends if an opt-out period begins; and

• (b) begins when an opt-out period ends (provided that the borrower has, at that time, had a repayment holiday for a total of less than 3 years).

(6) If a borrower is overseas based and chooses to have an opt-out period, that borrower's repayment obligation must be calculated in accordance with section 34.

(7) Notice under subsection (1) may be given—

• (a) by telephone; or

• (b) in writing; or

• (c) in any other manner acceptable to the Commissioner.

(8) However, the Commissioner may require notice to be given in writing.

(1) This section applies to an overseas based borrower—

• (a) whose 3-year repayment holiday has ended; or

• (b) who has chosen to have an opt-out period.

(2) A borrower to whom this section applies has the repayment obligations set out in subsections (3) to (5).

(3) If the borrower's loan balance is less than $1,000, the borrower's repayment obligation for the first tax year during which this section applies to the borrower is the amount of the borrower's loan balance.

(4) If the borrower's loan balance is—

• (a) $15,000 or less, the borrower's repayment obligation is $1,000 for each full tax year during which the borrower is overseas based:

• (b) more than $15,000 and less than or equal to $30,000, the borrower's repayment obligation is $2,000 for each full tax year during which the borrower is overseas based:

• (c) more than $30,000, the borrower's repayment obligation is $3,000 for each full tax year during which the borrower is overseas based.

(5) The borrower's repayment obligation for the portion of any tax year (being less than a full tax year) during which the borrower is overseas based is calculated as follows:

(6) If subsection (3) applies to a borrower's loan balance, subsections (4) and (5) do not apply.

(7) For the purposes of this section, the amount of a borrower's loan balance is the amount of the loan balance as at the date on which this section first applies to that borrower and then (subject to section 36A) as at 31 March in each year after that date, and includes any interest compounded as at that day.

(1) For each tax year in which an overseas based borrower is liable to pay a penalty on the entirety of the borrower's loan balance, that borrower's repayment obligation is zero.

(2) For each tax year in which an overseas based borrower's repayment obligation under section 34 is greater than the portion of that borrower's loan balance on which the borrower is not liable to pay a penalty (the penalty free loan balance), that borrower's repayment obligation is the amount of the penalty free loan balance.

(3) Nothing in this section affects overdue repayment obligations that were assessed in previous tax years.

(4) This section overrides section 34.

(1) A borrower's overseas based repayment obligation for a tax year must be paid by the borrower in 2 equal instalments.

(2) The instalments are due and payable in the tax year on—

• (a) 30 September:

• (b) 31 March.

If a borrower is overseas based for part, but not the whole, of a tax year as a result of that borrower becoming New Zealand based during that tax year,—

• (a) section 34(5) or section 35 (as the case may be) applies to any portion of the tax year during which the borrower is overseas based and—

  • (i) is not entitled to a repayment holiday; or

  • (ii) has chosen to have an opt-out period; and

• (b) the borrower's overseas based repayment obligation is payable in such instalments as the Commissioner determines; and

• (c) Part 2 applies to the borrower in respect of the period in the tax year during which he or she is New Zealand based (the New Zealand based period), except that the amount of the repayment threshold for the tax year must be proportionately decreased to the same proportion as the number of days in the New Zealand based period bears to the number of days in a year.

(1) As soon as practicable after being notified that, or becoming aware that, a borrower is or will be overseas based, the Commissioner must make an assessment of the amount of that borrower's overseas based repayment obligation for that year.

(2) The Commissioner must continue to make an assessment of the amount of a borrower's overseas based repayment obligation for each year, or part of a year, that the borrower remains overseas based.

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

(4) The Commissioner must give notice to the borrower of the amount assessed as soon as practicable after the making of the assessment.

(5) Subsection (4) does not apply if the amount assessed is zero.

(1) Any borrower who will be absent from New Zealand for a period of more than 6 months shall, before leaving New Zealand, provide the Commissioner with—

• (a) either—

  • (i) a permanent overseas address; or

  • (ii) a New Zealand address to which any notice to the borrower may be delivered; or

  • (iii) the name and address of a person in New Zealand empowered to act for the borrower; and

• (b) any information that the Commissioner reasonably requires in order to determine the borrower's overseas based repayment obligation (if any); and

• (c) any information that the Commissioner reasonably requires in order to determine whether the borrower is entitled to the full interest write-off set out in section 38AK.

(2) When a borrower who is absent from New Zealand becomes aware that he or she will be absent from New Zealand for a period of more than 6 months, he or she must, as soon as practicable after becoming so aware, provide the Commissioner with the information required by subsection (1).

(3) [Repealed]

Where any borrower to whom section 37 applies returns to New Zealand, that borrower shall advise the Commissioner that the borrower has returned to New Zealand.

(1) A borrower is entitled to the full interest write-off set out in section 38AK if—

• (a) the borrower satisfies the 183-day requirement in section 38AB; or

• (b) the Commissioner grants an exemption to the borrower under section 38AE, 38AJ, or 38AJA.

(2) The conditions in section 38AK(2) apply to subsection (1).

(1) A borrower satisfies the 183-day requirement if that borrower is personally present in New Zealand for a period of 183 or more consecutive days after 31 March 2006 (a 183-day period).

(2) For the purposes of subsection (1), a borrower is treated as being personally present in New Zealand if—

• (a) he or she is personally absent from New Zealand for a period, or periods in the aggregate, of no more than 31 days during a period of what would otherwise have been a 183-day period; and

• (b) he or she is personally present in New Zealand for the first day of that 183-day period.

(3) A borrower who satisfies the 183-day requirement is entitled to the full interest write-off set out in section 38AK for the first day within the 183-day period and, subject to section 38AC, for each subsequent day.

(1) A borrower who has satisfied the 183-day requirement in section 38AB ceases to satisfy that requirement if he or she is personally absent from New Zealand for a period of 184 or more consecutive days (a 184-day absence).

(2) For the purposes of subsection (1), a borrower is treated as being personally absent from New Zealand if—

• (a) he or she is personally present in New Zealand for a period, or periods in the aggregate, of no more than 31 days during a period of what would otherwise have been a 184-day absence; and

• (b) he or she is personally absent from New Zealand for the first day of that 184-day absence.

(3) However, a borrower must not be treated as being personally absent from New Zealand for any day on which that borrower may be treated as being personally present in New Zealand under section 38AB(2).

(4) A borrower who has had a 184-day absence ceases to be entitled to the full interest write-off set out in section 38AK for the first day within the 184-day absence and, subject to section 38AB, for each subsequent day.

(5) Subsection (4) is subject to the Commissioner granting an exemption to a borrower under section 38AE, 38AJ, or 38AJA.

For the purposes of sections 38AB to 38AK, if a borrower is personally present in New Zealand for part of a day, that borrower is treated as being personally present in New Zealand for the whole of that day and not being personally absent from New Zealand for any part of that day.

(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 the principal reason that the borrower does not satisfy the 183-day requirement is because—

• (a) the borrower was personally absent from New Zealand in the service in any capacity of the Government of New Zealand; or

• (b) the borrower was personally absent from New Zealand because he or she was working as a volunteer or for token payment for a charitable organisation that, at the time the borrower did that work, was named in regulations made under this Act (charity); or

• (c) of an unexpected delay; or

• (d) of an unplanned personal absence; or

• (e) the borrower is required to be personally absent from New Zealand because of the borrower's employment or occupation; or

• (f) the borrower was personally absent from New Zealand because the borrower accompanied his or her wife or husband, civil union partner, or de facto partner (partner) overseas; or

• (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.

(2) 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.

(3) The Commissioner may grant an exemption—

• (a) under subsection (1)(b) in respect of any one borrower for a maximum aggregate period of up to 24 months; and

• (b) under subsection (1)(f) in respect of any one borrower whose partner was personally absent from New Zealand because the partner was working as a volunteer or for token payment for a charity, for a maximum aggregate period of up to 24 months.

(3A) The conditions in section 38AEA apply to subsection (1)(b).

(4) The conditions in section 38AF apply to subsection (1)(c).

(5) The conditions in section 38AG apply to subsection (1)(d).

(6) The conditions in section 38AH apply to subsection (1)(e).

(7) The conditions in section 38AI apply to subsection (1)(f).

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

(8) A borrower who applies to the Commissioner under this section must supply the Commissioner with all information, and in the manner, that the Commissioner may reasonably require in order to establish whether one of the grounds for the grant of an exemption in subsection (1)(a) to (g) applies.

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

An applicant under section 38AE(1)(b) must—

• (a) provide proof that the work he or she did as a volunteer or for token payment for a charitable organisation was 1 or more of the following:

  • (i) work to relieve poverty, hunger, sickness, or the ravages of war or natural disaster; or

  • (ii) work to improve the economy of a country that is listed on the Organisation for Economic Cooperation and Development’s list of countries receiving development assistance; or

  • (iii) work to raise the educational standards of a country that is listed on the Organisation for Economic Cooperation and Development’s list of countries receiving development assistance; and

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

An applicant under section 38AE(1)(c) must—

• (a) have been a resident during the time in question; and

• (b) provide proof—

  • (i) of the applicant's intended return to New Zealand; and

  • (ii) that if the applicant had returned to New Zealand as intended, the applicant would have satisfied the 183-day requirement in section 38AB; and

• (c) provide proof of the unexpected delay that resulted in the applicant not being able to return to New Zealand as intended; and

• (d) provide proof that the unexpected delay was due to an event or to circumstances beyond the reasonable control of the applicant, like (for example)—

  • (i) an airline strike, personal illness, or death of a family member:

  • (ii) a fire, flood, storm, earthquake, landslide, volcanic eruption, or other act of God:

  • (iii) an explosion or nuclear, biological, or chemical contamination:

  • (iv) sabotage, terrorism, or an act of war (whether declared or not).

An applicant under section 38AE(1)(d) must—

• (a) have been a resident during the time in question; and

• (b) provide proof of the duration of the applicant's unplanned personal absence from New Zealand; and

• (c) provide proof that the applicant's unplanned personal absence was due to an event or to circumstances beyond the reasonable planning and control of the applicant, like (for example)—

  • (i) the illness or death of a family member who is overseas:

  • (ii) the applicant's employer requiring the applicant to attend a conference overseas.

An applicant under section 38AE(1)(e) must—

• (a) have been a resident during the time in question; and

• (b) have a permanent place of abode only in New Zealand; and

• (c) provide proof that the applicant receives either—

  • (i) a PAYE income payment as defined in section RD 3(1) of the Income Tax Act 2007, derived from New Zealand; or

  • (ii) income from a business that has a permanent place of business in New Zealand; and

• (d) provide proof that the majority of the applicant's personal absences from New Zealand are because of the applicant's employment or occupation.

An applicant under section 38AE(1)(f) must—

• (a) have been a resident during the time in question; and

• (b) provide proof of the applicant's relationship with his or her wife or husband, civil union partner, or de facto partner (partner); and

• (c) provide proof that the applicant's personal absence from New Zealand was because the applicant was accompanying his or her partner overseas; and

• (d) provide proof that one of the following applies:

  • (i) the applicant's partner was personally absent from New Zealand—

    • (A) in the service in any capacity of the Government of New Zealand; or

    • (B) because he or she was working as a volunteer or for token payment for a charitable organisation named in regulations made under this Act; or

  • (ii) the applicant's partner satisfies the conditions in section 38AH; or

  • (iii) the applicant's partner satisfies the conditions in section 38AJ(2); or

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

(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.

(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 the principal reason that the borrower does not satisfy the 183-day requirement is that the borrower is undertaking full-time study at post-graduate or under-graduate level overseas.

(2) An applicant under subsection (1)—

• (a) must provide the Commissioner with a document from the NZQA verifying that the applicant's course is at post-graduate or under-graduate level for the purposes of this section; and

• (b) must provide the Commissioner with evidence from the applicant's overseas education provider verifying that the applicant is enrolled full-time in the course verified by the NZQA; and

• (c) 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

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

(3) 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.

(4) In this section,—

(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,—

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

(1) When a borrower is entitled to a full interest write-off under section 38AA, the amount of interest calculated on the borrower's loan balance for the days to which this subsection applies must be reduced to zero.

(2) Subsection (1)—

• (a) applies only to days on or after 1 April 2006 on which a borrower—

  • (i) is personally present in New Zealand in accordance with the requirements of sections 38AB to 38AD; or

  • (ii) is treated as being personally present in New Zealand under section 38AB(2), 38AE(2), 38AJ(3), or 38AJA(5); and

• (b) does not apply to the days on which a borrower is personally present in New Zealand but is treated as being personally absent from New Zealand under section 38AC(2).

(1) The Commissioner may at his or her discretion, if the Commissioner considers that it is fair and reasonable to do so, reduce the amount of interest calculated on an eligible borrower's loan balance to zero for interest chargeable during some or all of the period starting on the day on which the borrower first received a student loan and ending 182 days after that day.

(2) If the Commissioner reduces the amount of interest calculated on an eligible borrower's loan balance to zero under subsection (1), the Commissioner must specify the start and end dates for the period for which the amount of interest is reduced to zero.

(3) The Commissioner may specify a start date of 1 April 2006, or any date after that date.

(4) In this section,—

(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.

(1) Except as provided in this section, no interest shall be payable on any credit balance.

(2) Where a repayment deduction has been made in respect of any borrower or a borrower has, in any tax year, paid an amount to the Commissioner before the transfer of the loan to the Commissioner and, as a result of that repayment deduction or payment, as the case may be, the balance held by the Commissioner is in credit, any interest chargeable on the money so advanced to the date of the transfer shall be reduced by an amount equal to the interest calculated on the daily credit balance held by the Commissioner at the total interest rate.

(3) Notwithstanding subsection (2), the amount of the reduction made in accordance with the said subsection (2) shall not exceed the interest transferred to the Commissioner for collection.

(4) Nothing in this section limits the application of section 120 of the Tax Administration Act 1994 (as in force before the enactment of the Tax Administration Amendment Act (No 2) 1996),—

• (a) where it applies by virtue of section 36(2) of the Tax Administration Amendment Act (No 2) 1996; and

• (b) which is to be construed as if—

  • (i) references in that section to a competent objection were references to a challenge a borrower is entitled to make under Part 8A of the Tax Administration Act 1994 as it applies by virtue of Part 5; and

  • (ii) the proviso to section 120(1) of the Tax Administration Act 1994 read “provided that where the amount of the disputed repayment obligation that has been paid is less than $100 no interest shall be payable under this section.”; and

  • (iii) all other changes necessary to give effect to this section were made.

(1) The Commissioner shall, as soon as practicable after the end of any tax year, give any borrower who was charged with interest in that tax year written notice of the amount of interest charged in that tax year.

(2) Except where the person establishes by proceedings under Part 8A of the Tax Administration Act 1994 that the person should not have been charged with that amount of interest, the amount of interest charged shall be taken to be correct.

(3) Subsection (2) does not prevent the Commissioner from amending the amount of interest charged if this is necessary to correct an error.

(4) If the amount of interest charged is corrected, the Commissioner must give written notice to the relevant borrower as soon as practicable after the amendment.

(1) A borrower is liable to pay a late payment penalty if the borrower does not pay by the due date—

• (a) any part of a terminal repayment obligation; or

• (b) any part of an instalment of an interim repayment; or

• (c) any part of an overseas based repayment obligation; or

• (d) any amount, being a loan balance or interest, that is payable as a result of a demand made under a loan contract; or

• (e) any underestimation penalty imposed under section 44A.

(2) The late payment penalty the borrower is liable to pay under subsection (1) is—

• (a) 1.5% of the amount of the default; and

• (b) 1.5% of the amount of the default as at each day that falls 1 month after the day on which a penalty is imposed under paragraph (a) or under this paragraph.

(3) For the purposes of this section—

(1) If, at the due date for payment of the third instalment, a periodic payer has estimated the interim repayment obligation and—

• (a) the estimate applying at the third instalment date is less than 80% of the periodic payer's residual repayment obligation and is less than the periodic payer's interim repayment obligation would have been had the periodic payer not estimated; and

• (b) the amount of interim repayments made on or before the third instalment date is less than 80% of the periodic payer's residual repayment obligation for the tax year—

the person (subject to subsection (3)) is liable to pay to the Commissioner, by way of penalty, an amount calculated in accordance with subsection (2).

(2) In relation to any tax year, the amount of underestimation penalty payable under this section is an amount calculated in accordance with the following formula:

(3) If the Commissioner is satisfied that a periodic payer has become liable for underestimation penalty for a tax year under this section by reason of—

• (a) the enactment of any Act amending the Income Tax Act 2007 or the making of any regulation or Order in Council relating to income tax, on or after 1 March in that tax year and on or before 20 April in the immediately succeeding tax year; or

• (b) the Commissioner making public, on or after 1 March in that tax year and on or before 20 April in the immediately succeeding tax year, any ruling in relation to any provision of the Income Tax Act 2007 and that ruling is different from that previously made public by the Commissioner in relation to that provision; or

• (c) the adoption by the person of an incorrect tax position which is corrected for the tax year,—

the Commissioner shall, to the extent that the penalty is higher than it would otherwise have been, write off the penalty or a part thereof.

(4) A penalty imposed under this section is deemed to be due and payable on—

• (a) the seventh day of the month specified in Schedule 13, Part A of the Income Tax Act 2004 as the month for payment of the borrower's terminal tax, unless the month is January; and

• (b) 15 January, when January is the month specified in Schedule 3, Part A of the Income Tax Act 2007.

(1) No interest may be charged on any portion of a loan balance on which a borrower is liable to pay a penalty.

(2) Subsection (1) applies—

• (a) despite any provision in a loan contract; and

• (b) with effect from 1 April 1992.

The Commissioner shall, as soon as practicable after charging a penalty, give the person charged with that penalty written notice of the amount of that penalty.

In this section and sections 45B to 45H, unless the context otherwise requires,—

(1) For the purposes of this Act, an excess repayment, in respect of a borrower, is any amount paid to the Commissioner in respect of a tax year in excess of that borrower's repayment obligation for that tax year.

(2) However, the following are not excess repayments:

• (a) any amount paid in respect of a tax year when a repayment obligation, repayment deduction, interim repayment, terminal repayment obligation, or penalty is, or will be, due and payable in respect of that tax year or any prior tax year (the due amount), except to the extent that the amount paid is in excess of all due amounts:

• (b) any amount that was paid before 1 April 2009:

• (c) any amount that is paid in respect of a tax year that ended on or before 31 March 2009.

(3) Excess repayments may be made—

• (a) by any means, including repayment deductions, interim repayments, and voluntary payments; and

• (b) in 1 or more payments in respect of a tax year; and

• (c) in respect of a tax year, at any time during that tax year and, if the borrower is a periodic payer, at any time up to and including the due date for payment of the final instalment of that borrower's interim repayments for that tax year.

(1) Subsection (2) applies to a borrower if—

• (a) the borrower's total excess repayments in respect of a tax year are $500 or more; and

• (b) at the beginning of the tax year in respect of which the excess repayments were made, the borrower's IRD loan balance was $550 or more.

(2) If this subsection applies to a borrower, the Commissioner must reduce the borrower's IRD loan balance by an amount equal to 10% of the borrower's total excess repayments in respect of the relevant tax year.

(1) Subsection (2) applies to a borrower if—

• (a) the borrower's final excess repayment in respect of a tax year is $500; and

• (b) at the date on which the final excess repayment was made, the borrower's IRD loan balance was more than $500 but less than $550.

(2) If this subsection applies to a borrower, the Commissioner must reduce the borrower's IRD loan balance to zero.

(1) Subsection (2) applies to a borrower if—

• (a) the borrower's total excess repayments in respect of a tax year are less than $500; and

• (b) the difference between the borrower's total excess repayments in respect of that tax year and $500 (the shortfall) is because of an under-deduction through the PAYE system; and

• (c) the shortfall meets 1 or more of the following criteria:

  • (i) it is less than $20:

  • (ii) it is due to the borrower commencing or ceasing employment:

  • (iii) it is due to an action or an omission of the borrower's employer; and

• (d) the Commissioner considers that the borrower's total excess repayments in respect of that tax year would have been $500 or more if the under-deduction referred to in paragraph (b) had not occurred; and

• (e) at the beginning of the tax year in respect of which the excess repayments were made, the borrower's IRD loan balance was $550 or more.

(2) If this subsection applies to a borrower, the Commissioner must reduce the borrower's IRD loan balance by an amount equal to 10% of the borrower's total excess repayments in respect of the relevant tax year that the Commissioner considers would have been made if the under-deduction referred to in subsection (1)(b) had not occurred.

(1) If a borrower's IRD loan balance will be fully repaid as a result of it being reduced by a 10% bonus, that bonus must be credited to that borrower's IRD loan balance as at the date on which the final excess repayment was made.

(2) If a borrower's loan balance will not be fully repaid as a result of being reduced by a 10% bonus, that bonus must be credited to the borrower's loan balance with effect from—

• (a) 1 April in the tax year that follows the tax year for which the excess repayments were made; or

• (b) any other date that the Commissioner considers appropriate if the borrower dies or is declared bankrupt.

(3) Nothing in subsection (1) or (2) requires the Commissioner to credit a 10% bonus to a borrower's IRD loan balance before the Commissioner has determined that borrower's total excess repayments in respect of a tax year.

(4) The total amount of a 10% bonus that may be provided to a borrower must not exceed an amount equal to one-eleventh of that borrower's IRD loan balance on either—

• (a) the date on which the 10% bonus is provided; or

• (b) an earlier date determined by the Commissioner, at his or her discretion, that is within the relevant tax year.

(5) The Commissioner may only determine a date under subsection (4)(b) if, in respect of a borrower,—

• (a) 1 or more excess repayments are made in respect of a tax year; and

• (b) a final excess repayment was made in respect of the same tax year.

(1) If a borrower elects that the whole or part of an excess repayment in respect of a tax year be refunded, any 10% bonus that was provided to that borrower must be reduced to an amount equal to 10% of the remaining excess repayment (if any) in respect of the tax year that is $500 or more.

(2) If the 10% bonus was provided under section 45E(2), then the remaining excess repayment (if any) in respect of the tax year that is $500 or more must be determined by reference to the borrower's total excess repayments in respect of the relevant tax year that the Commissioner considered (under section 45E) would have been made if the under-deduction referred to in section 45E(1)(b) had not occurred.

The Commissioner must, in all material that provides information about repayment bonuses and that is made available to all borrowers, include a statement to the effect that borrowers are advised to seek appropriate financial advice before making excess repayments in order to obtain a 10% bonus.

Sections 45A to 45H apply with effect from 31 March 2009.

(1) Any amount payable under this Act by a borrower shall be recoverable as a debt due to the Crown.

(2) Sections 156 to 165 of the Tax Administration Act 1994, as far as they are applicable and with the necessary modifications, shall apply for the purposes of this Act, as if—

• (a) every reference in those provisions to income tax were a reference to a repayment obligation; and

• (b) the reference to an assessment in section 162 were a reference to an assessment made under Part 2 or Part 3; and

• (c) every reference to “this Act” in sections 164 and 165 were a reference to this Act.

Any amount not otherwise due and payable in accordance with this Act shall be due and payable 1 month after the date of issue of the assessment or notice.

Any payment made under this Act shall be deemed to have been made on the date on which it was received by the Commissioner.

(1) For the purpose of calculating interest payable,—

• (a) any payment other than a repayment deduction shall be deemed to have reduced the IRD loan balance by the amount of that payment on the day it was made; and

• (b) any repayment deduction shall be deemed to have reduced the IRD loan balance by the amount of that deduction on the 15th day of the month in which the deduction was made from the borrower's salary or wages.

(2) Other than for the purpose of calculating interest, any payment made under this Act or under the loan contract in a tax year shall be credited to the repayment obligation for that tax year at the time when the Commissioner makes an assessment of that obligation.

Any payment in respect of a repayment obligation must be off-set—

• (a) first, against any interest charged; and

• (b) secondly, against any principal outstanding.

(1) The Commissioner may refrain from refunding any repayment obligation (or part of a repayment obligation) payable to a borrower, or any repayment deduction (or part of a repayment deduction) payable to an employer or a PAYE intermediary, if—

• (a) the amount payable to a borrower in any tax year is $5 or less; or

• (b) the amount payable to an employer or a PAYE intermediary in any period is $5 or less.

(2) The Commissioner may refrain from issuing a notice of assessment or refrain from collecting and write off any repayment obligation (or part of a repayment obligation) payable by a borrower, or any repayment deduction (or part of a repayment deduction) payable by an employer or a PAYE intermediary, if—

• (a) the amount payable by a borrower in any tax year is $20 or less; or

• (b) the amount payable by an employer or a PAYE intermediary in any period is $20 or less.

(3) The Commissioner may refrain from collecting payment of a repayment obligation (or part of a repayment obligation) if that repayment obligation (or part of a repayment obligation)—

• (a) is more than $20 but less than $334; and

• (b) has not been paid by the due date (as that term is defined in section 44).

(4) Any amount that, under subsection (3), the Commissioner does not collect from a borrower is subject to interest at the total interest rate on the daily amount outstanding (except to the extent that this Act otherwise requires).

(5) This section applies despite anything in this Act.

(1) The Commissioner shall not charge, and there shall be no liability to pay, any penalty imposed in respect of any default in paying any repayment obligation or other amount by its due date where the amount of the penalty calculated in respect of that default does not exceed $5 (or such other amount as the Governor-General may, from time to time, by Order in Council declare for the purposes of this section).

(2) Where the amount of any penalty initially calculated in respect of any default does not exceed $5 (or such other amount as may be declared under subsection (1)),—

• (a) the amount so calculated shall be deemed not to be a penalty, and shall not be added to the amount in default; and

• (b) no further amount of penalty shall be added under the relevant provision in respect of any further period during which the default continues.

(3) This section applies only to borrowers' obligations under this Act.

(1) Where any penalty is payable by a person under this Act in relation to any default by that person, on application for relief made by or on behalf of that person, the Commissioner may, having regard to the circumstances of the case and if the Commissioner thinks it equitable to do so, grant relief to the person by remitting such part of the penalty as the Commissioner considers equitable.

(1A) An application for relief may be made—

• (a) by telephone; or

• (b) in writing; or

• (c) in any other manner acceptable to the Commissioner.

(1B) However, the Commissioner may require an application for relief to be made in writing.

(2) The payment of the penalty, in whole or in part, shall not preclude the Commissioner from granting relief from that penalty in accordance with subsection (1).

(3) If the amount of any penalty is reduced, the Commissioner shall apply any amount overpaid in accordance with section 56 or section 57.

(4) This section applies only to borrowers' obligations under this Act.

(1) A borrower may apply to the Commissioner for 1 or more of the following:

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

• (b) hardship relief for the current tax year:

• (c) hardship relief for the next tax year.

(2) An application under subsection (1)(c) must be made on or before 31 March in the tax year that immediately precedes the tax year for which relief is sought.

(3) An application may be made—

• (a) by telephone; or

• (b) in writing; or

• (c) in any other manner acceptable to the Commissioner.

(4) However, the Commissioner may require an application to be made in writing.

(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.

(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.

(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 one 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.

(1) Any amount that, as a result of a decision under section 55, 55A, or 55B, the Commissioner has refunded to, or not collected from, a borrower is subject to interest at the total interest rate on the daily amount outstanding (except to the extent that this Act otherwise requires).

(2) Section 56 or 57, as appropriate, applies to a borrower who, as a result of the Commissioner refraining from deducting or collecting any amount from that borrower, or reducing that borrower's repayment obligation, has had deductions made, or has made payments, in excess of that borrower's repayment obligations as set out in section 56(1)(a) to (e) or section 57(1).

(1) A borrower who applies for hardship relief under section 54 must inform the Commissioner as soon as practicable if there is a change in the borrower's circumstances that—

• (a) means that any information supplied to the Commissioner under section 54 is incorrect or inaccurate; or

• (b) may affect whether or not a borrower would have been, or will continue to be, granted hardship relief under section 55, 55A, or 55B.

(2) The Commissioner may, at the end of a tax year, review any decision he or she made during that year to grant hardship relief to a borrower.

(3) If for any reason the Commissioner considers that the circumstances for the grant of that hardship relief have changed, the Commissioner may do either or both of the following:

• (a) require the borrower to take any action that is required in order to reverse the effects of the hardship relief that was granted to the borrower:

• (b) reinstate all or part of the repayment deduction or repayment obligation that would have applied to the borrower if hardship relief had not been granted to the borrower, and require payment of any amount that would have been due during the relevant tax year.

(1) Where for any tax year a borrower has—

• (a) had repayment deductions made in excess of the repayment obligation for that tax year; or

• (b) paid interim repayments in excess of the repayment obligation for that tax year; or

• (c) paid an amount in excess of the amount of any instalment of an interim repayment; or

• (d) made a voluntary payment in excess of the repayment obligation for that tax year; or

• (e) paid an amount in excess of the amount of any penalty charged,—

the Commissioner shall—

• (f) credit the amount so deducted or paid in excess, so far as it extends, to any repayment obligation or instalment of an interim repayment for any other tax year or any other amount that has become due and payable that the borrower has failed to pay in the order in which that repayment obligation or instalment of an interim repayment obligation or other amount became due and apply any amount not so credited in accordance with either subsection (1A) or (1B).

• (g) [Repealed]

(1A) A borrower may elect that the whole or part of the amount not credited—

• (a) be refunded; or

• (b) be applied to the loan balance.

(1B) Where a borrower does not make an election, the Commissioner must apply the amount not credited to the loan balance.

(2) Any election under subsection (1A)(b) shall be irrevocable.

(2A) Where a borrower has not made an election, the borrower may request the Commissioner, within 6 months of the date on which the Commissioner issued the notice of assessment that showed the amount applied to the loan balance, to refund, in whole or in part, the amount so credited.

(2B) A refund that is made under this section must comply with section 184A of the Tax Administration Act 1994.

(3) Notwithstanding subsection (1), no refund shall be made under this section after the expiry of the period of 8 years immediately after the end of the year in which the assessment was made or, in any case where the original assessment has been altered (whether once or more than once) after the end of the year in which the original assessment was made, unless written application for the refund is made by or on behalf of the borrower before the expiry of that period.

(1) Where any overseas based borrower has paid an amount in excess of the overseas based repayment obligation for any year, the Commissioner shall—

• (a) credit the amount so paid in excess, so far as it extends, to any repayment obligation for any other tax year or any other amount that has become due and payable that the borrower has failed to pay in the order in which that repayment obligation or other amount became due; and

• (b) notify the borrower of any amount so paid in excess that is not credited under paragraph (a).

(2) The borrower may request the Commissioner, within 2 months of the date on which the Commissioner issued the notice, to refund any amount so paid in excess that is not credited under subsection (1)(a).

(2A) Unless subsection (4) applies, a refund of an amount paid in excess of a borrower's repayment obligation must be made in the manner required under section 184A of the Tax Administration Act 1994.

(3) Any such request shall be irrevocable.

(4) If no such request is made within that time, any amount paid in excess that is not credited under subsection (1)(a) shall be applied in reduction of the loan balance.

Sections 57B to 57D—

• (a) apply despite anything to the contrary in this Act; and

• (b) only apply to a refund that was elected or requested by a borrower under section 56, or requested by a borrower under section 57, on or after 30 November 2005.

No refund may be made under section 56 or section 57 of any amount that was deducted or paid in excess (as set out in section 56(1)(a) to (e) or section 57(1)) prior to 31 March 2006.

(1) This section applies to refunds made under section 56 or section 57 of any amount that was deducted or paid in excess (as set out in section 56(1)(a) to (e) or section 57(1)) during the period from 31 March 2004 to 31 March 2006 (referred to in this section and section 57D as a relevant refund).

(2) The amount of any relevant refund must be excluded from the amount of a borrower's loan balance for the purposes of section 38AK(1).

(3) Until such time as the relevant refund and all interest charged on it are repaid in full to the Commissioner,—

• (a) all payments in respect of the borrower's repayment obligation must be off-set only against the portion of that borrower's loan balance that consists of the relevant refund that remains outstanding and the interest charged on it (the priority portion); and

• (b) any amount deducted or paid in excess of the borrower's repayment obligation must be off-set only against the priority portion; and

• (c) section 50 must be applied in order to give effect to paragraphs (a) and (b).

(4) In their application to a borrower who is entitled to a full interest write-off under section 38AA and who has also received a relevant refund, all references in sections 38C, 39, and 40 to “IRD loan balance” and “loan balance” must be treated as being a reference only to that borrower's priority portion.

(1) On the application of a borrower, the Commissioner may exempt part or all of a relevant refund made to that borrower from section 57C.

(2) The Commissioner may only exempt a relevant refund if the Commissioner is satisfied that that refund was necessary to alleviate the borrower's significant financial hardship.

(3) If the Commissioner grants an exemption under subsection (1), the Commissioner must specify the amount of the relevant refund that is exempt from section 57C.

(4) In this section, significant financial hardship includes significant financial difficulties that arise because of—

• (a) a borrower's inability to meet minimum living expenses; or

• (b) a borrower's inability to carry out his or her usual occupation because of his or her temporary or permanent illness, injury, or disability; or

• (c) a borrower's inability to meet mortgage repayments on his or her principal family residence resulting in the mortgagee seeking to enforce the mortgage on the residence; or

• (d) the cost of modifying a residence to meet special needs arising from a disability of a borrower or a borrower's dependant; or

• (e) the cost of medical treatment for an illness or injury of a borrower or a borrower's dependant; or

• (f) the cost of palliative care for a borrower or a borrower's dependant; or

• (g) the cost of a funeral for a borrower's deceased dependant.

In any case where, upon the investigation by the Commissioner of the liability of a borrower for that borrower's repayment obligation over a group of 2 or more income years,—

• (a) the Commissioner assesses the borrower with a repayment obligation for any year of assessment in respect of which no assessment has been made previously or alters an assessment for any year so as to increase the repayment obligation; and

• (b) the Commissioner is satisfied that for any year or years of assessment within that group of years any repayment obligation has been paid in excess of the amount properly payable,—

the Commissioner may, to the extent that in the Commissioner's opinion is equitable, allow any amount so paid in excess to be deducted from or set off against any repayment obligation due and unpaid for any year or years within that group of income years, notwithstanding that the time for the making of a refund of any repayment obligation so paid in excess may have expired.

(1) This section applies to any case where, upon investigation by the Commissioner of a borrower's liability for a repayment obligation for any tax year, the Commissioner is satisfied that—

• (a) the repayment obligation assessed by the Commissioner was incorrect; and

• (b) as a result, any repayment obligation has been paid in excess of the amount properly payable by that borrower (a difference in assessment amounts).

(2) In any case to which this section applies,—

• (a) the Commissioner must notify the relevant borrower of the amount of the difference in assessment amounts; and

• (b) the borrower may request the Commissioner, within 6 months of the date on which the Commissioner issued the notice, to 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.

(4) If no request for a refund is made by a borrower within the required 6 months, the difference in assessment amounts must be applied in reduction of the relevant borrower's loan balance.

(5) This section applies despite anything to the contrary in this Act.

A refund of repayment obligation or interest that has been paid in excess of the amount required under this Act may be made without further appropriation than this section.

If—

• (a) a borrower should die; or

• (b) the Commissioner has reasonable grounds for believing that a borrower has died; or

• (c) a borrower has an IRD loan balance that, as at the last day of any tax year, is less than $20,—

the IRD loan balance shall be reduced to zero.

(1) Subsection (2) applies if—

• (a) the Commissioner notifies a borrower of the borrower's outstanding IRD loan balance; and

• (b) the borrower pays that loan balance in full (including interest charged to the date of notification) within 30 days of the date of notification.

(2) The Commissioner must cancel the interest that accrues between the date of a notification and the date on which the payment is received.

(3) This section applies to notifications provided on or after 1 June 1998.

If a borrower's net income is for a period other than 12 months as a result of the borrower changing his or her balance date for income tax purposes, for the purpose of calculating the amount of that borrower's repayment obligation, the repayment threshold is calculated as follows:

(1) For the purposes of this section, authorised person means—

• (a) the Commissioner of Inland Revenue or any officer of the Inland Revenue Department who is authorised by the Commissioner to disclose and receive information under this section; or

• (b) any employee of the loan manager who is authorised by the chief executive to disclose and receive information under this section; or

• (c) any employee of any tertiary institution who is authorised by the chief executive to disclose and receive information under this section.

(1A) For the purposes of section 81(4)(g) of the Tax Administration Act 1994, authorised person includes the chief executive, or any officer of the specified department who is authorised by the chief executive to disclose or receive information under this section.

(2) No obligation as to secrecy or other restriction imposed by any enactment or otherwise on the disclosure of information may prevent—

• (a) an authorised person from disclosing to another authorised person any information required for the purpose of enabling the Commissioner to correctly identify a borrower whose loan is to be transferred from the loan manager to the Commissioner for collection; or

• (ab) [Repealed]

• (b) the Commissioner from disclosing to the chief executive such information as may be necessary to investigate circumstances in which an authorised person considers—

  • (i) a student loan may have been improperly obtained; or

  • (ii) an attempt has been made to obtain a student loan by improper means.

(2AA) [Repealed]

(2A) For the purposes of subsection (2)(b), the information that the Commissioner may disclose includes the following:

• (a) particulars of any loan repayments made:

• (b) the current loan balance:

• (c) such particulars as the Commissioner may possess as to the whereabouts of a borrower:

• (d) whether a person specified by the chief executive is a taxpayer:

• (e) in respect of an address specified by the chief executive, the number of borrowers recorded as resident at that address:

• (f) any other particulars that the Commissioner considers relevant to the purposes of subsection (2)(b).

(3) Subject to subsection (4), information obtained pursuant to subsection (2) shall not be disclosed except to an authorised person and for the purposes of that subsection.

(4) No obligation as to secrecy or other restriction imposed by any enactment or otherwise upon the disclosure of information shall prevent the chief executive, or any officer of the specified department who is authorised by the chief executive to receive information under this section, from receiving information disclosed from any authorised person to another authorised person in accordance with subsection (2) for any purpose that relates to the administration of the student loan scheme.

(5) For the purposes of section 81(4)(g) of the Tax Administration Act 1994, the chief executive, or any officer of the specifed department who is authorised by the chief executive to receive information under this section, shall be deemed to be an authorised person under this section.

(6) In this section, specified department means the department that is, with the authority of the Prime Minister, for the time being responsible for the administration of the Social Security Act 1964.

(1) The purpose of this section is to facilitate the exchange of information between the department and the New Zealand Customs Service for the purpose of establishing an information matching programme to assist the Commissioner to verify—

• (a) borrowers' entitlements to a full interest write-off under section 38AA:

• (b) whether borrowers are New Zealand based or overseas based for the purposes of this Act:

• (c) whether borrowers are resident or non-resident for the purposes of this Act.

(2) For the purpose of this section, the Commissioner may provide to the chief executive of the New Zealand Customs Service any of the following information that is held by the department:

• (a) a borrower's name or any other name by which a borrower is known: