STUDENT LOAN SCHEME ACT 2011

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STUDENT LOAN SCHEME ACT 2011

- As at 29 March 2025
- Act 62 of 2011

TABLE OF PROVISIONS

1. Title
2. Commencement

PART 1 - Preliminary matters, loan advances, and New Zealand-based and overseas-based borrowers

SUBPART 1 - Preliminary provisions

3. Purposes
4. Interpretation
5. Meaning of unpaid amount
6. Application of Act
7. Application of Act to bonded scholarships
8. Act binds the Crown
8A. Application of provisions of Act

SUBPART 2 - Establishment of student loan

9. Purposes of sections 10, 11, 16, and 17
10. Loan manager must notify Commissioner of persons who apply for student loan
11. Commissioner must confirm information provided by loan manager
12. Loan manager must provide copy of loan contract
13. Certain information must be disclosed in loan contract
14. Student loan establishment fee
15. Right to cancel loan contract
16. Loan manager must notify Commissioner of borrower's details
16A. Loan manager must notify Commissioner of any details held about borrower’s contact person
17. Loan manager must transfer loan advance debts to Commissioner for collection
18. Commissioner must notify borrowers of loan advances
19. Commissioner must inform borrowers about consolidated loan balance
20. Borrower must be notified of certain changes to obligations

SUBPART 3 - Determining whether borrowers are New Zealand-based or overseas-based

21. Overview of being New Zealand-based or overseas-based
22. Meaning of New Zealand-based
23. Meaning of overseas-based
24. Treatment of partial days
25. Commissioner may treat certain borrowers as being physically in New Zealand
26. Method of making application and provision of evidence and information
27. Commissioner must notify borrower and specify period or conditions when granting application
27A. Commissioner must keep and publish list of charities
27B. When entity qualifies to be listed as charity
27C. Application by entity to be listed as charity
27D. Commissioner may list tax charities even if no application made
27E. Commissioner may remove entity’s listing as charity
28. Borrower to notify Commissioner of absence from New Zealand of 184 or more days
29. Borrower to notify Commissioner of return to New Zealand of more than 183 days

PART 2 - Repayment obligations of borrowers

30. Borrower's liability to repay consolidated loan balance
31. Repayment obligations that apply to New Zealand-based borrowers and overseas-based borrowers
32. Interrelationship between subparts 1 and 2

SUBPART 1 - New Zealand-based borrowers' repayment obligations for salary or wages

33. Application of this subpart
34. Repayment codes for New Zealand-based borrowers who derive salary or wages
35. Borrowers with SL repayment code must notify employers
36. Employer or PAYE intermediary must make standard deductions from salary or wages
37. Deduction rates that apply to standard deductions from salary or wages
38. Employer or PAYE intermediary must make Commissioner deductions from salary or wages
39. Employer or PAYE intermediary must make borrower deductions from salary or wages
40. Deductions from main benefits
41. Definitions relating to repayment thresholds
42. Application for unused repayment threshold to be allocated to secondary employment earnings
43. Determining estimated salary or wages
44. Calculating borrower's unused repayment threshold for pay period
45. Special deduction rate certificate for unused repayment threshold
46. Issue and application of special deduction rate certificate
47. Ongoing obligations of borrower to review and notify
48. Time when special deduction rate ceases to apply
49. Commissioner must issue additional deduction rate notice to obtain Commissioner deductions
50. Procedures for issue of additional deduction rate notice
51. Assessment of standard deductions that ought to have been made
52. Recovery of assessed amounts
53. Definitions relating to exemption for full-time students
54. Borrowers who are eligible for exemption from standard deductions
55. Declaration by eligible borrowers for exemption from standard deductions
56. Notice from Commissioner
57. Consequences of exemption from standard deductions
58. Withdrawal of declaration
59. Notice of change of circumstances
60. When exemption from standard deductions ceases to apply
61. Information to show salary or wage deductions made
62. Commissioner must determine question about amount of salary or wage deductions
62A. Commissioner may notify employers when loan balance close to zero
Note
63. Commissioner determines what is significant under-deduction or significant over-deduction
64. Standard deductions are full and final unless significant error
65. Significant over-deduction identified by borrower
66. Commissioner must determine whether significant over-deduction made
67. Procedure if significant over-deduction made
68. Applicable procedures if significant under-deduction
Note
68A. Commissioner over-deduction identified by borrower
68B. Commissioner must determine whether Commissioner over-deduction made
68C. Procedure if Commissioner over-deduction made
69. Prohibition on applications or declarations to maintain integrity of student loan scheme
70. PAYE rules apply to salary or wage deductions
71. Salary or wage deductions in addition to income tax withheld

SUBPART 2 - Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages
Note

72. Application of this subpart
73. Meaning of adjusted net income, Schedule 3 adjustments, and related terms
74. Notification of Schedule 3 adjustments
75. Extension of time for notification of Schedule 3 adjustments
76. Commissioner to assess borrower's end-of-year repayment obligation
76A. Commissioner must assess borrowers to whom section 72(b) applies as having zero repayment obligation
77. Calculation of borrower's end-of-year repayment obligation if salary or wages less than annual repayment threshold
78. Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold
79. Payment of end-of-year repayment obligation
80. Calculation of terminal payment for tax year
81. Due date for terminal payment
82. Calculation of interim payments for next tax year
83. Commissioner may assess interim payments if information for preceding year not provided
84. Due dates for payment of interim payments
85. Commissioner's powers in relation to due dates
86. Interim payments to be paid in same manner as provisional tax
87. Consequence of failure to meet repayment obligations

SUBPART 3 - New Zealand-based borrowers' repayment obligations for other income
Note

88. Application of this subpart
88A. Meaning of adjusted net income
Note
89. Commissioner to assess borrower's other income repayment obligation
Note
90. Calculation of borrower's other income repayment obligation where salary or wages below threshold
91. Calculation of borrower's other income repayment obligation where salary or wages equal to or above threshold
Note
92. Payment of other income repayment obligations
93. Calculation of remaining repayments for tax year
94. Due dates for payment of remaining repayments
95. Calculation of interim payments for next tax year
96. Commissioner may assess interim payments if information for preceding year not provided
97. Due dates for payment of interim payments
98. Commissioner's powers in relation to due dates
99. Interim payments to be paid in same manner as provisional tax
100. Consequence of failure to meet repayment obligations
Note
101. Borrower may apply for reduction of deduction rate to reflect lower repayment obligation
102. Special deduction rate certificate for lower repayment obligation
103. Issue and application of special deduction rate certificate
104. Time when special deduction rate ceases to apply

SUBPART 4 - Overseas-based borrowers' repayment obligations

105. Application of this subpart
106. Meaning of temporary repayment suspension
Note
107. Borrowers who intend to be overseas-based may apply for temporary repayment suspensions
107A. Contact person to be nominated
107B. Grant of temporary repayment suspension
108. Duration of temporary repayment suspension
108A. Borrowers who have had, or are having, temporary repayment suspensions under Student Loan Scheme Act 1992
109. Assessments for years in which borrower is overseas-based
110. Repayment obligations of overseas-based borrowers
111. Exceptions to repayment obligations of overseas-based borrowers
112. Repayment to be made by instalments
113. Consequence of failure to meet repayment obligations

SUBPART 5 - New Zealand-based non-resident borrowers and borrowers with New Zealand-based and overseas-based repayment obligations

114. Notification of Schedule 3 adjustments by New Zealand-based non-resident borrowers
114A. Extension of time for notification of Schedule 3 adjustments
115. Repayment obligations of borrowers who are overseas-based for part of tax year
115A. Reassessment of borrower's overseas-based repayment obligations in year of return to New Zealand
116. Overseas-based borrowers who derive salary or wages from New Zealand
117. Overseas-based borrower's standard and Commissioner deductions satisfy overseas-based repayment obligation

PART 3 - Excess repayments

118. Interpretation
119. Meaning of excess repayment
120. Commissioner must notify borrower of excess repayment
121. Options that apply to excess repayments
122. Exception to general rule if repayment obligations for prior tax years reassessed

SUBPART 1 - Excess repayment bonus
Note

123. Borrower's entitlement to 10% bonus for excess repayment of $500 or more
124. Borrower's entitlement to bonus if loan balance is less than $550
125. Borrower may be entitled to 10% bonus if under-deduction is due to PAYE system
126. Time at which 10% bonus is credited
127. Restriction on amount of 10% bonus
128. Application of sections 118 to 122 and this subpart to part years
129. Consequences of refund or credit to next tax year
130. Commissioner must advise borrowers to seek financial advice

SUBPART 2 - Refund of excess repayments and satisfaction of future repayment obligation

131. Limit on use of excess repayments
132. Borrower may receive refund or apply excess repayment to future repayment obligations

PART 4 - Interest, relief, penalties and offences, rights of objection, and rights to challenge

SUBPART 1 - Interest

133. No interest applied to student loans except as specified in this Part
Note
134. Loan interest charged for all overseas-based borrowers
135. Loan interest calculated daily and charged and compounded annually
136. Notification that loan interest has compounded
137. Full interest write-off for New Zealand-based borrowers
138. Loan interest written off for quick repayment of consolidated loan balance
139. Late payment interest charged on unpaid amount
140. Notification of late payment interest
141. Late payment interest reduced if instalment arrangement complied with
141A. Late payment interest reduced if deduction or extraction notice applies
142. No interest on consolidated loan balance in credit
143. Commissioner's power to correct interest when charged in error

SUBPART 2 - Relief

144. Power of Commissioner in relation to small amounts
145. Application for different types of relief for borrower
146. Commissioner may grant relief from late payment interest
Note
146A. Commissioner may grant relief from penalties
147. Hardship relief for any tax year
148. Special deduction rate certificate for hardship relief
149. Issue and application of special deduction rate certificate
150. Time when special deduction rate ceases to apply
151. Effect of Commissioner's decision under section 147
152. Borrowers must notify Commissioner of change of circumstances
153. Commissioner may review grant of hardship relief
154. Application for instalment arrangement

SUBPART 3 - Penalties and offences

155. Late notification penalty for Schedule 3 adjustments under section 74
156. Due dates for payment of late notification penalty
157. Definitions relating to student loan shortfall penalties
158. Student loan shortfall penalties may be imposed on certain borrowers
159. Commissioner may impose student loan shortfall penalties
160. Notification and payment obligations if Commissioner imposes student loan shortfall penalty
161. Student loan shortfall penalty reduced or removed to reflect change to shortfall penalty
Note
161A. Underestimation penalty where interim payments underestimated as at last interim payment date
162. Certain offence provisions in Tax Administration Act 1994 apply to borrowers
162A. Offence for default of overseas-based repayment obligation
162B. Arrest of liable person
163. Offence to prejudice employees because of student loan repayment liability
164. Proceedings to be commenced by Commissioner
165. Charging document may charge several offences
166. Time for filing charging document

SUBPART 4 - Borrower's right to object to loan manager about details of loan advances

167. Borrowers may object to details of loan advances
168. Loan manager must consider objections
169. Power to require objection to be determined by chief executive
170. Chief executive must consider objections required to be determined by chief executive
171. Right to apply to Disputes Tribunal or District Court
172. Notification of Disputes Tribunal's or District Court's decision about objection

SUBPART 5 - Dispute procedures and rights to challenge

173. Part 4A of Tax Administration Act 1994 applies to disputes under this Act
Note
174. Dispute process must be completed before challenge is made
174A. Part 8A of Tax Administration Act 1994 applies to challenges under this Act
175. Challenge to details of consolidated loan balance
176. Challenge to decision concerning treating borrowers as being physically in New Zealand
176A. Challenge to decision relating to listing of entity as charity
177. Challenge to special deduction rate certificate for unused repayment threshold
178. Challenge to additional deduction rate notice
179. Challenge to determination of salary or wage deduction
180. Challenge to decision regarding significant over-deduction
181. Challenge to prohibition on applications or declarations
182. Challenge to assessments
182A. Challenge to decision concerning temporary repayment suspension
183. Challenge to interest charged
184. Challenge to decision concerning relief
185. Challenge to late notification penalty
186. Challenge to student loan shortfall penalty
187. Person who may make challenge
188. Commissioner's decision on challenges

PART 5 - Matters of general application and miscellaneous matters

SUBPART 1 - Matters of general application

189. Annual administration fee
190. Tax year other than 12 months due to change in balance date
191. Limit on repayment obligation for pay period or tax year
192. Payment date not otherwise specified
193. Recovery of unpaid amount
193A. Contact person may be requested to assist
193B. Changes relating to identity and details of contact person
193C. Changes relating to contact details of borrower
194. Order in which certain deductions and payments offset against borrower's consolidated loan balance
195. Date on which salary or wage deductions and payments treated as being made and credited
195B. Date on which final-year fees-free entitlement treated as being credited
196. Cancellation of interest if consolidated loan balance repaid early
197. Write-off of consolidated loan balance
198. Commissioner may remedy incorrect application of Act
199. Manner of making refunds
200. Appropriation of refunds
201. Loan advances and other information may be altered
202. Provisions of Tax Administration Act 1994 and Income Tax Act 2007 to apply to this Act

SUBPART 2 - Miscellaneous matters

203. This Act overrides loan contracts
204. Commissioner may exercise rights in loan contracts to recall loans
205. Loan contract enforceable against minor
206. Student loan contracts are not credit contracts
207. Disclosure of information between authorised persons
208. Disclosure of information between Inland Revenue Department and New Zealand Customs Service for information-matching purposes
209. Power of Commissioner to access arrival or departure information
209A. Disclosure of information to Australian Taxation Office in relation to borrowers who are, or may be, overseas-based
210. Meaning of inform
211. Meaning of notify
212. Meaning of notify a person in writing
213. Meaning of formally notify
214. Notice requirements of Tax Administration Act 1994 do not apply
215. Regulations
216. Transitional regulations
217. Application of Legislation Act 2012
218. Transitional provisions concerning loan manager and loan advances
219. Early applications and issue of certificates for transition to this Act
220. Application, savings, and transitional provisions
221. Amendments to this Act
222. Amendments to Student Loan Scheme Act 1992 and Credit Contracts and Consumer Finance Act 2003
223. Amendments to other Acts
224. Amendments to other enactments
225. Student Loan Scheme Act 1992 repealed
226. Regulations revoked
SCHEDULE 1
SCHEDULE 2
SCHEDULE 3
SCHEDULE 4
SCHEDULE 5
SCHEDULE 6
SCHEDULE 7
SCHEDULE 8
SCHEDULE 9
SCHEDULE 10

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