Student Loan Scheme Amendment Act 2012

1: Title
This Act is the Student Loan Scheme Amendment Act 2012.
2: Commencement
1: Sections 7 59(2)
2: Section 55
3:
4: The rest of the Act is deemed to have come into force on 1 April 2012. Section 2(3) repealed 30 March 2013 section 51(2) Student Loan Scheme Amendment Act 2013
1: Amendments to principal Act
3: Principal Act amended
This Act amends the Student Loan Scheme Act 2011 2012-04-12 Student Loan Scheme Act 2011 Section 55 is deemed to have come into force on 1 January 2012. The rest of the Act is deemed to have come into force on 1 April 2012. Except Sections 7 and 59(2) which come into force on 1 January 2013. Except Section 57 comes into force on 1 April 2013. 2013-01-01 Student Loan Scheme Act 2011 Section 7 and 59(2).
4: Purposes of Act
The purposes of this Act are—
a: to assess the repayment obligations of borrowers by—
i: disregarding any business or investment losses; and
ii: treating salaries and wages separately from investment and business income:
b: to provide for repayment holidays to be granted by the Commissioner and to limit their term to 365 days:
c: to require borrowers who apply for repayment holidays to have contact persons who may be requested to assist the Commissioner in locating borrowers:
d: to make miscellaneous amendments to the principal Act
5: Interpretation
1: The definition of consolidated loan balance section 4(1) ; and
c: any interest calculated and accrued under section 135(1) .
2: The definition of net income section 4(1)
3: The definition of other income section 4(1) net income for that tax year other than from salary or wages or adjusted net income for that tax year other than from
4: The definition of other income repayment obligation section 4(1) other income the borrower derives for a tax year, calculated in accordance with section 91 adjusted net income the borrower derives for a tax year, calculated in accordance with section 90 91
5: The definition of significant over-deduction section 4(1) , from a borrower who does not derive other income in the tax year in which the deduction is made,
6: Paragraph (b) of the definition of special deduction rate section 4(1)
7: Section 4(1) adjusted net income section 88A net pre-taxed income section 73 .
6: Certain information must be disclosed in loan contract
Section 13
g: the borrower’s right to object to the details of loan advances set out in a notification given to the borrower in accordance with section 18:
h: the timeframe within which an objection by a borrower under section 167 must be received by the loan manager ( see .
7: New section 16A inserted
The following section is inserted after section 16
16A: Loan manager must notify Commissioner of any details held about borrower’s contact person
1: In any case where a borrower has advised the loan manager of the details of the borrower's contact person, the loan manager must notify the Commissioner of the following details, to the extent that they are available:
a: the name of the individual:
b: a postal address for the individual:
c: a telephone number for the individual:
d: an electronic address for the individual:
e: any further information specified in regulations.
2: The Commissioner and the loan manager may, for the purpose of this section, determine by written agreement between them—
a: the frequency with which that notification must be supplied; and
b: the form in which that notification must be supplied; and
c: the method by which that notification must be supplied.
3: Subsection (2)(b) and (c)
8: Commissioner may treat certain borrowers as being physically in New Zealand
Section 25(2) 10 11
9: Repayment codes for New Zealand-based borrowers who derive salary or wages
Section 34
2: The repayment code STC
a: the employer is issued with a special tax code certificate under section 24F of the Tax Administration Act 1994; or
b: the Commissioner requires or permits its use in any other case.
3: If another Act requires an employer to withhold an amount of tax for a PAYE income payment to a borrower and pay the amount to the Commissioner,—
a: the repayment code SL
b: the repayment code STC
10: Borrowers with
SL Section 35(2)
b: if an STC
11: Employer or PAYE intermediary must make standard deductions from salary or wages
Section 36(1)(c) a special deduction rate an STC
12: Deduction rates that apply to standard deductions from salary or wages
1: Section 37(1) If a borrower’s repayment code is SL If the employer of a borrower has not been notified that a special deduction rate applies to the borrower
2: Section 37(2) If a borrower’s repayment code is STC If the employer has been notified that a special deduction rate applies to the borrower
13: Employer or PAYE intermediary must make Commissioner deductions from salary or wages
Section 38(3)(b) tax repayment
14: Employer or PAYE intermediary must make borrower deductions from salary or wages
Section 39(3)(b) tax repayment
15: Deductions from income-tested benefits
Section 40
2A: If the amount of the deduction determined under subsection (2)(b) is zero, then sections 34 and 35 do not apply.
16: Application for unused repayment threshold to be allocated to secondary employment earnings
Section 42(1) ; and
17: Special deduction rate certificate for unused repayment threshold
Section 45(a) and the repayment code to be used special deduction rate
18: Issue and application of special deduction rate certificate
Section 46(2)(a) or 102
19: Commissioner must issue additional deduction rate notice to obtain Commissioner deductions
Section 49(1)(a)
i: an error or omission by the borrower's employer or PAYE intermediary; or .
20: Procedures for issue of additional deduction rate notice
Section 50
2: An additional deduction rate notice issued to an employer or a PAYE intermediary in relation to a borrower revokes an additional deduction rate notice previously issued to that employer or PAYE intermediary in relation to the borrower.
21: Assessment of standard deductions that ought to have been made
1: Section 51(1)(a)(i) or by the borrower's employer or PAYE intermediary borrower
2: Section 51(2)
22: Borrowers who are eligible for exemption from standard deductions
Section 54(1)
b: reasonably expects that the annual repayment threshold for year A will not be exceeded by his or her—
i: gross income from salary or wages; and
ii: in the case of a borrower to whom subpart 2 applies, net pre-taxed income; and
iii: in the case of a borrower to whom subpart 3 applies, adjusted net income.
23: Significant over-deduction identified by borrower
Section 65(2) the borrower believes the significant over-deduction was made the significant over-deduction is believed to have occurred
24: Procedure if significant over-deduction made
1: Section 67(2)(d) , subject to subsections (2A) borrower may
2: Section 67
2A: In any case where there is also, in relation to the borrower and any tax year, a significant under-deduction or an unpaid amount that the Commissioner has at any time identified, the significant under-deduction or unpaid amount may be offset against the significant over-deduction before any refund is made.
25: New section 73 substituted
Section 73
73: Meaning of net pre-taxed income
1: In this Act, net pre-taxed income a = b – c where— a is the borrower’s net pre-taxed income for the tax year b is the borrower’s pre-taxed income (as defined in section 4(1)) for the tax year c is the borrower’s allowable expenses for the tax year.
2: However, the pre-taxed income and allowable expenses for any investment activity for a tax year are ignored when calculating a borrower's net pre-taxed income for that tax year if, treating the borrower as having only the pre-taxed income and allowable expenses of that activity, the borrower would have a net loss for that year.
3: For the purposes of applying subsection (2)
4: For the purposes of applying subsection (2) subsection (3)
5: In this section,— allowable expenses
a: expenditure or interest for which a person is allowed a deduction under section DB 3, DB 5, or DB 6 of the Income Tax Act 2007:
b: a premium under a policy of income protection insurance for which a person is allowed a deduction under section DA 1 of the Income Tax Act 2007 investment activity 2007 No 97 s MB 3
26: New section 88A inserted
The following section is inserted after section 88
88A: Meaning of adjusted net income
1: In this Act, adjusted net income a = b – c where— a is the borrower's adjusted net income b is the borrower's annual gross income other than from salary or wages c is the borrower's annual total deductions.
2: However, the income and deductions for any investment activity, or for any business, for a tax year are ignored when calculating a borrower's adjusted net income for that tax year if, treating the borrower as having only the income and deductions of that investment activity or of that business, the borrower would have a net loss for that year.
3: For the purposes of applying subsection (2)
4: For the purposes of applying subsection (2) subsection (3)
5: In this section,— business investment activity 2007 No 97 s MB 3(2)
27: New sections 90 and 91 substituted
Sections 90 91
90: Calculation of borrower's other income repayment obligation where salary or wages below threshold
1: Subsection (2)
a: this subpart applies to a borrower; and
b: the gross income that the borrower derived from salary or wages is less than the annual repayment threshold.
2: The borrower’s other income repayment obligation for the tax year must be calculated in accordance with the formula— a = b × (c – d) where— a is the borrower’s other income repayment obligation for the tax year b is the repayment percentage c is the income that the borrower derives from adjusted net income and from salary or wages for the tax year d is the annual repayment threshold.
3: If the borrower’s other income repayment obligation for the tax year is zero or less, the borrower has no other income repayment obligation for the tax year.
91: Calculation of borrower's other income repayment obligation where salary or wages equal to or above threshold
1: Subsection (2)
a: this subpart applies to a borrower; and
b: the gross income that the borrower derived from salary or wages is equal to or more than the annual repayment threshold.
2: The borrower’s other income repayment obligation for the tax year must be calculated in accordance with the formula— a = b × c where— a is the borrower’s other income repayment obligation for the tax year b is the repayment percentage c is the income that the borrower derives from adjusted net income for the tax year.
28: Due dates for payment of remaining repayments
1: Section 94(2)(b) , or his or her notification of gross income and deductions under section 114 or 114A return of income
2: Section 94(4)(b) , or his or her notification of gross income and deductions under section 114 or 114A return of income
29: Heading and sections 101 to 104 repealed
The heading above section 101 sections 101 to 104
30: New sections 106 to 108A and heading substituted
Sections 106 to 108 heading above section 107
106: Meaning of repayment holiday
In this subpart, repayment holiday Repayment holiday from overseas-based repayment obligations
107: Borrowers who intend to be overseas-based may apply for repayment holidays
1: A borrower may, by notifying the Commissioner, apply to the Commissioner for a repayment holiday if he or she intends to be overseas-based.
2: The application may be made from New Zealand or from overseas, but no application may be made by an overseas-based borrower.
107A: Contact person to be nominated
1: At the time of making an application under section 107
2: The borrower nominates a contact person by notifying the Commissioner of an individual who is willing to act as the borrower's contact person and by specifying the following details in that notification:
a: the name of the individual:
b: a New Zealand postal address for the individual:
c: an electronic address for the individual (if the individual has one):
d: a New Zealand telephone number for the individual (if the individual has one):
e: any further information specified in regulations.
107B: Grant of repayment holiday
1: The Commissioner may grant a repayment holiday to a borrower who applies under section 107
a: has not reached the borrower's limit; and
b: has complied with section 107A
2: A borrower who is granted a repayment holiday becomes entitled to that repayment holiday on the day on which the borrower becomes overseas-based.
3: For the purposes of this subpart, a borrower reaches the borrower's limit if—
a: the borrower has had 1 or more repayment holidays, granted under this Act, for a period of 365 days or for periods that total 365 days; or
b: the borrower has had 1 or more repayment holidays under Part 3 of the Student Loan Scheme Act 1992 for a period of 3 years or for periods that total 3 years; or
c: the borrower has had—
i: 1 or more repayment holidays under Part 3 of the Student Loan Scheme Act 1992 for a period of less than 3 years or for periods that total less than 3 years; and
ii: 1 or more repayment holidays, granted under this Act, for a period that equals, or for periods that in total equal, the lesser of—
A: 365 days; and
B: the remainder of the period of the repayment holiday to which the borrower would have been entitled under Part 3 of the Student Loan Scheme Act 1992 if that Act had not been repealed; or
d: the borrower has had his or her repayment holiday under Part 3 of the Student Loan Scheme Act 1992 continued under section 108A(2)
108: Duration of repayment holiday
1: Despite section 107B(2)
2: The repayment holiday of a borrower who has become entitled to it under section 107B(2)
a: the day that the borrower reaches the borrower's limit; and
b: the day on which the borrower ceases to be overseas-based.
3: A borrower's repayment obligation must be calculated in accordance with sections 110 and 111 if the borrower is, at any time, overseas-based after his or her repayment holiday has ended.
108A: Borrowers who have had, or are having, repayment holidays under Student Loan Scheme Act 1992
1: A New Zealand-based borrower who has had 1 or more repayment holidays under Part 3 of the Student Loan Scheme Act 1992, but who has not reached the borrower's limit (within the meaning of section 107B(3) section 107
2: An overseas-based borrower who, as at 31 March 2012, has a repayment holiday under Part 3 of the Student Loan Scheme Act 1992 that, but for the repeal of that Act, would have continued under that Act continues to have a repayment holiday under this Act, but for no longer than the lesser of—
a: 365 days; and
b: the remainder of the period of the repayment holiday to which the borrower would have been entitled under Part 3 of the Student Loan Scheme Act 1992 if that Act had not been repealed.
3: The repayment obligation of a borrower to whom subsection (2)
31: Repayment obligations of overseas-based borrowers
1: Section 110
1: This section applies to an overseas-based borrower who is not, or is no longer, entitled to a repayment holiday under section 107B 108A(2)
2: Section 31(2) repealed 1 April 2014 section 10(2) Student Loan Scheme (Budget Measures) Amendment Act 2012
32: Exceptions to repayment obligations of overseas-based borrowers
Section 32 repealed 1 April 2014 section 10(2) Student Loan Scheme (Budget Measures) Amendment Act 2012
33: Repayment to be made by instalments
Section 112
3: However, a borrower’s overseas-based repayment obligation for a tax year must be paid by the borrower in instalments as determined by the Commissioner if any repayment holiday granted to the borrower under section 107B section 108A(2)
34: New section 114A inserted
The following section is inserted after section 114
114A: Extension of time for making notification of worldwide income
1: This section applies if section 114(2) applies.
2: A borrower may apply to the Commissioner for an extension of time for the making of a notification of the borrower's annual gross income and annual total deductions in accordance with section 37(3) to (5) of the Tax Administration Act 1994, and those subsections apply, as far as applicable and with all necessary modifications, as if—
a: the reference to the due date required under this section the due date required under section 114(3) of the Student Loan Scheme Act 2011
b: every reference to a taxpayer were a reference to a borrower; and
c: every reference to a return or a return of income were a reference to a notification of the borrower's annual gross income and annual total deductions.
35: Repayment obligations of borrowers who are overseas-based for part of tax year
Section 115(1)
c: section 110(4) or 111 (as applicable) applies to any portion of the tax year during which the borrower is overseas-based and is not entitled to a repayment holiday (as defined in section 106 .
36: Overseas-based borrower's standard and Commissioner deductions satisfy overseas-based repayment obligation
Section 117(3)
37: Interpretation
Section 37 repealed 1 April 2013 section 10(3) Student Loan Scheme (Budget Measures) Amendment Act 2012
38: Meaning of excess repayment
1: Section 119(2)
2: In determining whether an excess repayment has been made, the Commissioner must—
a: disregard a salary or wage deduction or a payment made to the Commissioner that is subsequently refunded; and
b: treat a borrower's repayment obligation as if any relief granted under section 147 had not been granted; and
c: disregard any fee refunded by an education provider to the loan manager or the Commissioner.
2: Section 119(3) total obligations total obligations
a: all unpaid amounts; and
b: any standard deductions that were deducted in the tax year except—
i: a significant over-deduction; or
ii: a standard deduction or Commissioner deduction for the purposes set out in section 49(1)(a) made (in accordance with section 116) from the salary or wages an overseas-based borrower derives from New Zealand; and
c: any Commissioner deductions for the purposes set out in section 49(1)(a) that were deducted in the tax year; and
d: any other income repayment obligations for the tax year; and
e: any pre-taxed repayment obligation for the tax year; and
f: any overseas-based repayment obligation for the tax year; and
g: any amount that must be paid by a borrower in accordance with a written notification under section 52 for the tax year; and
h: penalties imposed under subpart 3 of Part 4 .
3: The definition of total payments section 119(3)
a: all salary or wage deductions that were deducted in the tax year (including salary and wage deductions made in accordance with section 116 from the salary or wages an overseas-based borrower derives from New Zealand); and .
39: Section 125 repealed
Section 39 repealed 1 April 2013 section 10(3) Student Loan Scheme (Budget Measures) Amendment Act 2012
40: Consequences of refund or credit to next tax year
Section 40 repealed 1 April 2013 section 10(3) Student Loan Scheme (Budget Measures) Amendment Act 2012
41: Loan interest calculated daily and charged and compounded annually
1: Section 135(1) and accrues is calculated
2: Section 135(2) or an earlier date determined by the Commissioner, at his or her discretion, that is within the relevant tax year
42: Commissioner may grant relief from late payment interest
Section 146
3: So much of any cancelled late payment interest that has already been paid must be offset as follows:
a: first, against any unpaid amount the borrower has; and
b: secondly, any remainder must be offset against the borrower’s current year obligations; and
c: thirdly, any remainder must be offset against the borrower’s loan balance.
4: Where any amount is, under subsection (3)(c)
43: Special deduction rate certificate for hardship relief
Section 148(2)(a) and the repayment code to be used specifies a special deduction rate
44: Issue and application of special deduction rate certificate
Section 149(2) , 102,
45: Late filing penalty for certain declarations
1: Section 155(3) net income adjusted net income or net pre-taxed income
2: Section 155(5) and section 156 In this section
46: Due dates for payment of late filing penalty
Section 156(b) and (c) file a return of income under section 37 of the Tax Administration Act 1994 make a declaration under section 75 or 114A
47: Annual administration fee
Section 189(1) has a loan balance has a consolidated loan balance
48: New sections 193A and 193B inserted
The following sections are inserted after section 193
193A: Contact person may be requested to assist
1: The Commissioner may at any time advise a person that the person has been nominated as the contact person of a borrower.
2: If, in any case where a borrower has an unpaid amount, the Commissioner does not have the current address details for the borrower or is uncertain as to the accuracy of the address details for the borrower, the Commissioner may request the borrower's contact person—
a: to notify the Commissioner of the borrower's current address details; or
b: to ask the borrower to notify the Commissioner of the borrower's current address details.
3: In subsection (2), address details
a: all postal addresses for the borrower; and
b: all electronic addresses for the borrower (if the borrower has any); and
c: all telephone numbers for the borrower (if the borrower has any).
4: The Commissioner may not make a request under subsection (2) unless the contact person confirms that he or she is willing to act as the borrower's contact person.
5: The Commissioner—
a: may not disclose any matters about the borrower other than those required to be disclosed for the purposes of this section; and
b: may use any information obtained from a request under this section only for the purposes of this Act.
6: In this section and section 193B contact person
a: an individual whose name has been notified under section 16A
b: an individual nominated by the borrower under section 107A 193B
193B: Changes relating to identity and details of contact person
1: Whenever the contact person of a borrower dies or becomes incapacitated or is for any other reason ineligible, unable, or unwilling to act as the borrower's contact person, the borrower must nominate another contact person who resides in New Zealand in the manner provided by section 107A(2)
2: If there is a change in any of the details of a borrower's contact person, the borrower must promptly notify the Commissioner of the changed details.
49: Date on which salary or wage deductions and payments treated as being made and credited
1: Section 195(3) loan interest and
2: Section 195
3A: For the purpose of calculating loan interest,—
a: a salary or wage deduction is credited on the 16th day of the month in which the deduction is made; and
b: all other payments are credited on the day after the date on which they are received by the Commissioner.
50: Cancellation of loan interest if consolidated loan balance repaid early
Section 196
2: The Commissioner must cancel any loan interest that is calculated and accrued between the date of the notification and the date on which the payment is received.
51: Early applications and issue of certificates for transition to this Act
1: Section 219(1)(a) , 101,
2: Section 219(1)(b) (in accordance with section 34(2)(b))
3: Section 219(2)(a) , 102,
52: Amendments to this Act
Section 221 , and is subject to the transitional provisions, manner
53: Schedule 1 amended
Schedule 1
11: Certain exempt borrowers must notify Commissioner of their worldwide income
1: This clause applies to a borrower who is treated as being physically in New Zealand under any of paragraphs (b), (g), (h), (i), and (j) of section 25(1).
2: The borrower must notify the Commissioner of the borrower's annual gross income and annual total deductions in accordance with section 114(2), and sections 114(3) and (4) and 114A
54: Schedule 2 amended
Clause 1 of Schedule 2
d: every reference to a tax code were a reference to, as applicable, the repayment codes SL STC SLCIR SLBOR .
55: Schedule 5 amended
Schedule 5
56: Schedule 6 amended
1: Clause 6(1)(b) Schedule 6 2012 2013
2: Clause 6(1)(b) of Schedule 6 or late payment interest under section 139(1) of this Act Student Loan Scheme Act 1992
3: Clauses 9 and 10(4)(b)(ii)(B) of Schedule 6
57: Schedule 7 amended
Section 57 repealed 30 March 2013 section 51(2) Student Loan Scheme Amendment Act 2013
58: Schedule 9 amended
The item relating to section 81(4)(g) and (gb) Schedule 9
gba: communicating to a contact person (within the meaning of section 193A .
2: Transitional provision
Part 2 repealed 1 January 2013 section 59(2)
59: Transitional provision
2013-01-01 Student Loan Scheme Amendment Act 2012 Section 59(2) (This section is repealed). Section 59 repealed 1 January 2013 section 59(2)