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

1: Title
This Act is the Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Act 2010.
2: Commencement
1: Sections 4 26(1) 31 32
2: The rest of this Act comes into force on the day after the date on which it receives the Royal assent.
3: Principal Act amended
This Act amends the Student Loan Scheme Act 1992 2010-03-07 Student Loan Scheme Act 1992 except ss 4, 26(1) 2010-04-01 Student Loan Scheme Act 1992 ss 4, 26(1), 31, 32
1: Amendments to principal Act
4: Interpretation
Section 2(1) total interest rate total interest rate a% + 0.74% = y% where— a% is the average, rounded to the nearest 2 decimal places, of the monthly average 10-year government bond yield rates published by the Reserve Bank of New Zealand for the 5 years ending in December in the year that precedes the relevant tax year y% rounded to the nearest 1 decimal place, is the total interest rate for the relevant tax year.
5: Repayment obligation for New Zealand based borrowers
Section 14
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)
6: Employer or PAYE intermediary to make repayment deductions
1: Section 19(1) , or the Commissioner has given a notice under section 20A under section 18
2: Section 19(2) or an increased repayment deduction rate
7: New section 20A inserted
The following section is inserted after section 20
20A: Standard deduction rate may be increased in certain circumstances
1: This section applies if—
a: the amount of a borrower's repayment deductions in the current tax year or in any tax year prior to the current tax year is, or was, less than the amount required under this Act; or
b: a borrower has failed to pay any amount that has become due and payable in accordance with this Act.
2: If this section applies, the Commissioner may, in relation to the borrower, issue an increased repayment deduction rate notice that—
a: varies the standard deduction rate by increasing it up to a maximum rate of 15 cents in each complete dollar; and
b: specifies the total amount payable by the borrower (which may include any penalties, interest, or other amount that has become due and payable); and
c: requires the borrower's employers to make repayment deductions at the increased rate until those repayment deductions equal the amount specified under paragraph (b)
3: If the Commissioner issues an increased repayment deduction rate notice, the Commissioner must send that notice, together with a notice that complies with section 18(2), directly to the borrower's employers.
4: The increased repayment deduction rate applies until the earlier of the date on which—
a: the repayment deductions made in accordance with the increased repayment deduction rate notice equal the amount specified in subsection (2)(b)
b: the Commissioner notifies the employer otherwise.
5: An increased repayment deduction rate notice issued in relation to a borrower under this section revokes—
a: any special repayment deduction rate certificate previously issued to that borrower; and
b: any notice previously given to an employer by that borrower in accordance with section 18.
6: The Commissioner must give a borrower a copy of any notice that is given to that borrower's employers under this section as soon as practicable after it is issued.
7: Nothing in this section limits the application of sections 53 to 55D.
8: Full interest write-off for certain borrowers
Section 38AA(1)(b) or section 38AJ , 38AJ, or 38AJA
9: Full interest write-off ceases if borrower is personally absent from New Zealand for 184 days
Section 38AC(5) or section 38AJ , 38AJ, or 38AJA
10: Power of Commissioner to grant exemptions to borrowers who do not satisfy 183-day requirement
1: Section 38AE(1)(b) that, at the time the borrower did that work, was charitable organisation
2: Section 38AE(1) ; 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.
3: Section 38AE
7A: The conditions in section 38AIA subsection (1)(g)
4: Section 38AE(8) (f) (g)
5: Section 38AE
9: Subsections (1)(g) and (7A)
11: Conditions to charitable organisation exemption
Section 38AEA recognised by the United Nations as a developing country listed on the Organisation for Economic Cooperation and Development’s list of countries receiving development assistance
12: Conditions to marriage, civil union, or de facto exemption
Section 38AI(d) ; or
iv: the applicant's partner satisfies the conditions in section 38AJA(4)
13: New section 38AIA inserted
The following section is inserted after section 38AI
38AIA: Conditions to Niue, Cook Islands, Tokelau, and Ross Dependency exemption
1: An applicant under section 38AE(1)(g)
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
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) New Zealand New Zealand (which includes Niue, the Cook Islands, Tokelau, and the Ross Dependency)
14: New section 38AJA inserted
The following section is inserted after section 38AJ
38AJA: Power of Commissioner to grant exemption to borrowers undertaking full-time overseas study
1: On the application of a borrower who does not satisfy the 183-day requirement in section 38AB, the Commissioner may, if the Commissioner considers that it is fair and reasonable to do so, grant an exemption to the 183-day requirement to that borrower if either subsection (2) or (3) applies.
2: This subsection applies if the principal reason that the borrower does not satisfy the 183-day requirement is that the borrower is undertaking study that—
a: the borrower is enrolled in with a New Zealand tertiary education provider; and
b: if it is completed successfully, will count towards a qualification offered by a New Zealand tertiary education provider; and
c: is assessed by the NZQA as being equivalent to level 7 or above on the New Zealand Register of Quality Assured Qualifications developed by the NZQA under section 253(1)(c) of the Education Act 1989; and
d: is full-time and undertaken overseas as part of either—
i: a formal exchange programme approved by the New Zealand Government; or
ii: a formal agreement between a New Zealand tertiary education provider and an overseas tertiary provider.
3: This subsection applies if the principal reason that the borrower does not satisfy the 183-day requirement is that the borrower is undertaking study that—
a: the borrower is enrolled in with a New Zealand tertiary education provider; and
b: if it is completed successfully, will count towards a qualification offered by a New Zealand tertiary education provider; and
c: is assessed by the NZQA as being equivalent to level 8 or above on the New Zealand Register of Quality Assured Qualifications developed by the NZQA under section 253(1)(c) of the Education Act 1989; and
d: is full-time and undertaken overseas; and
e: cannot be completed in New Zealand.
4: An applicant under subsection (1)
a: must provide the Commissioner with evidence from the applicant's New Zealand tertiary education provider verifying that the applicant's study meets the requirements of either—
i: subsection (2)(b), (c), and (d)(i) or (ii)
ii: subsection (3)(b) to (e)
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)
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)
a: the start and end dates for the period for which the relevant borrower is treated as being personally present in New Zealand for the purposes of section 38AB; or
b: the conditions that must apply or be met in order for the relevant borrower to be treated as being personally present in New Zealand for the purposes of section 38AB.
6: In this section,— NZQA overseas tertiary provider
a: provides tertiary education or training; and
b: is based in a country other than New Zealand; and
c: is registered by an appropriate education authority in that country.
7: This section applies with effect from 31 March 2007.
15: Terms of full interest write-off
Section 38AK(2)(a)(ii) or section 38AE(2) or section 38AJ(3) , 38AE(2), 38AJ(3), or 38AJA(5)
16: New section 38AM inserted
The following section is inserted after section 38AL
38AM: Full interest write-off for quick repayment of loan balance
1: This section applies to a borrower who—
a: satisfies the 183-day requirement in section 38AB(1) and (2); and
b: fully repays his or her loan balance before the end of the 183-day period.
2: The amount of interest calculated on the loan balance of a borrower to whom this section applies must be reduced to zero for the period—
a: beginning on the first day of the 183-day period; and
b: ending on the day on which the borrower fully repays his or her loan balance.
3: This section applies with effect from 31 March 2006.
17: Late payment penalties
Section 44(1)(d) . ; or
18: Power of Commissioner in respect of small amounts
Section 51(3)(a) $333 $334
19: Borrowers may apply for hardship relief
Section 54(1)
a: hardship relief for any tax year prior to the current tax year: .
20: Sections 55 to 55B substituted
Sections 55 to 55B
55: Hardship relief for any tax year prior to current tax year
1: If an application is made under section 54(1)(a)
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
55A: Hardship relief for tax year immediately prior to current tax year may include refund
1: If an application is made under section 54(1)(a)
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)
a: retrospectively decrease that borrower's repayment obligation for the relevant tax year; and
b: refund the whole or part of the portion of the repayment obligation that is the difference in assessment amounts.
3: A refund that is made under this section must be made in the manner required under section 184A of the Tax Administration Act 1994.
55B: Hardship relief for current tax year or next tax year
1: If an application is made under section 54(1)(b) or (c), the Commissioner may, for any period the Commissioner considers equitable, reduce any amount that must be deducted or paid in order to meet the repayment obligation assessed or to be assessed for the current tax year or the next tax year if the Commissioner—
a: is satisfied that the amount being deducted or paid, or to be deducted or paid, has caused or will cause serious hardship to the borrower; or
b: considers that there are other special reasons that make it fair and reasonable to do so.
2: If the Commissioner reduces the amount to be deducted or paid by a borrower under subsection (1)
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)
b: reduce the percentage payable by that borrower under section 27(1) in accordance with the Commissioner's decision under subsection (1)
c: reduce that borrower's repayment obligation under section 34 in accordance with the Commissioner's decision under subsection (1)
3: If the Commissioner reduces the amount to be deducted from, or paid by, a borrower to zero, section 18 does not apply to that borrower for the period for which that reduction applies.
4: If a borrower has given his or her employer notice in accordance with section 18 and the Commissioner subsequently reduces the amount to be deducted from, or paid by, a borrower to zero, the borrower must give a copy of the special repayment deduction rate certificate to his or her employer as soon as practicable after it is issued.
5: Section 24F of the Tax Administration Act 1994 applies, with all necessary modifications, to any special repayment deduction rate certificate issued under this section.
21: Effect of Commissioner's decision under section 55
1: The heading to section 55C section 55 section 55, 55A, or 55B
2: Section 55C(1) section 55 section 55, 55A, or 55B
22: Borrowers must inform Commissioner of change of circumstances and Commissioner may review
Section 55D(1)(b) section 55 section 55, 55A, or 55B
23: Excess repayments made by residents
The heading to section 56 residents borrowers
24: Cancellation of interest if IRD loan balance repaid early
Section 60A(1)(b) 15 30
25: Objection to decision concerning grant of exemption
1: Section 65A(a) or section 38AJ , 38AJ, or 38AJA
2: Section 65A(b) section 38AF, 38AG, 38AH, 38AI, or 38AJ(2) section 38AEA, 38AF, 38AG, 38AH, 38AI, 38AIA 38AJA(4)
3: Section 65A(c) or section 38AJ(3)(a) , 38AJ(3)(a), or 38AJA(5)(a)
4: Section 65A(d) or section 38AJ(3)(b) , 38AJ(3)(b), or 38AJA(5)(b)
26: Regulations
1: Section 87(1)(ab) and (ac)
2: Section 87(1)(b)
3: Section 87(4) or subsection (1)(ac) or subsection (1)(b) of this section
2: Consequential amendments to, and revocations of, other enactments
Consequential amendments to other enactment
27: Amendments to Tax Administration Act 1994
Sections 28 29 Tax Administration Act 1994 2010-03-07 Tax Administration Act 1994
28: Annual returns of income not required
1: Section 33A(1)(g) ; and
2: Section 33A(1)(h) and (i)
29: Officers to maintain secrecy
Section 81(4)(g) , (2AA), Consequential revocations of other enactments
30: Student Loan Scheme (Income Amount for Full Interest Write-off) Regulations 2005 revoked
The Student Loan Scheme (Income Amount for Full Interest Write-off) Regulations 2005 2010-03-07 Student Loan Scheme (Income Amount for Full Interest Write-off) Regulations 2005
31: Student Loan Scheme (Interest Rates Formulas) Regulations 2006 revoked
The Student Loan Scheme (Interest Rates Formulas) Regulations 2006 2010-04-01 Student Loan Scheme (Interest Rates Formulas) Regulations 2006
32: Student Loan Scheme (Total Interest Rate) Regulations 2009 revoked
The Student Loan Scheme (Total Interest Rate) Regulations 2009 2010-04-01 Student Loan Scheme (Total Interest Rate) Regulations 2009