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Student loans
Ngā pūtea tarewa ākonga

Staying interest-free when you're overseas

If you're going overseas - or accompanying your partner - for study or work you might be eligible for your student loan to stay interest-free.

What you need when studying overseas 

With an overseas provider

You'll need to provide evidence confirming:

  • an Overseas Study Assessment and the security number verifying that the course is equivalent to levels 7, 8, 9 or 10
  • confirmation from the overseas education provider of your full time enrolment for the verified course, and
  • study start and end dates.

With a New Zealand provider

You'll need to provide evidence from your New Zealand provider confirming:

  • your study is equivalent to level 8 or above on the New Zealand Register of Quality Assured Qualifications
  • you're enrolled full time and your study counts towards a New Zealand tertiary qualification
  • your course can't be completed in New Zealand, and
  • the exact start and end dates of overseas study.

On a Government-funded scholarship for study

This means a qualifying scholarship for full-time study (or part-time internship with part-time study).

Note

A government scholarship refers to partially and fully-funded scholarships provided by government departments and Crown agents.

The government department or agency needs to have a scholarship program in place. A person working for a government agency who just goes overseas for professional development won't meet the definition of undertaking study for a qualifying government scholarship.

You'll need to verify your eligibility with Education New Zealand (ENZ). You'll need to supply ENZ with the following details:

  • Your full name.
  • Name of the scholarship received and the New Zealand government department or agency that administers it.
  • The date the scholarship was awarded.
  • Evidence that you're enrolled for full-time study overseas, or part-time study with a part-time internship.
  • The start and end dates of the scholarship.
  • The start and end dates of the study (and any internship).

You'll then need to provide Inland Revenue with evidence that the scholarship has been assessed by ENZ and meets the criteria for a qualifying government-funded scholarship.

If your partner is accompanying you overseas, see the information below for accompanying partners.

As part of a formal exchange

You'll need to provide evidence from your New Zealand provider confirming:

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What you need when working overseas 

For the New Zealand Government

You'll need to provide evidence from the government agency you're working for stating:

  • your name
  • IRD number
  • the length of time you'll spend overseas including your return date, and
  • that your time overseas is for work for the New Zealand Government.

Your agency will need to provide this information on their letterhead.

For a New Zealand employer

If your employment or occupation requires you to be overseas, you'll need to provide evidence from your employer stating:

  • your name
  • IRD number
  • the length of time you'll spend overseas including your return date
  • an estimate of what your gross income will be for the work you'll be doing, and
  • the reason you're overseas is for your job.

Your employer will need to provide this information on their letterhead.

You'll also need to provide:

As a volunteer for a charitable organisation

You'll need to provide evidence from the charitable organisation you're volunteering for stating:

  • your name
  • IRD number
  • the length of time you'll spend overseas
  • information about the work you'll be doing for the organisation, and
  • an estimate of what your gross income (if any) will be for the work you'll be doing.

This information will need to be provided on the charitable organisations letterhead.

Charitable organisations

The organisation that you're volunteering for must be on the Charitable Organisations list at the time you're completing the work. A maximum of 24 months interest-free period applies.

As an intern receiving a Government-funded scholarship

This means a qualifying scholarship for full-time internship (or part-time internship with part-time study).

Note

A government scholarship refers to partially and fully-funded scholarships provided by government departments and Crown agents.

An internship is a short-term, temporary position (up to a maximum of 12 months) with an emphasis on on-the-job training and skills development.

The government department or agency needs to have a scholarship program in place. A person working for a government agency who just goes overseas for professional development won't meet the definition of undertaking work for a qualifying government scholarship.

You'll need to verify your eligibility with Education New Zealand (ENZ). You'll need to supply ENZ with the following details:

  • Your full name.
  • Name of the scholarship received and the New Zealand government department or agency that administers it.
  • The date the scholarship was awarded.
  • Evidence that the internship is full-time (or part-time with study) and is being undertaken overseas.
  • The start and end dates of the scholarship.
  • The start and end dates of the internship (and any study).

You'll then need to provide Inland Revenue with evidence that the scholarship has been assessed by ENZ and meets the criteria for a qualifying government-funded scholarship.

If your partner is accompanying you overseas, see the information below for accompanying partners.

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What you need if living in Niue, Cook Islands, Tokelau or Ross Dependency 

To be eligible you must meet your repayment obligations on or before the due date.

You'll need to provide the following evidence:

  • information from Customs (from each location you lived in) showing all travel for the period you're requesting an interest-free loan, or
  • a letter from an employer stating:
    • you are/were their employee
    • the date you started your employment
    • the date you ended your employment (if applicable)
    • any dates you may have been away from work
    • your gross income (annually if applicable), and
    • your employer's contact details.

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How to apply for an interest-free student loan 

To apply for an interest-free exemption your application must be in writing. You'll also need to provide evidence to support your application.

You'll need to determine your New Zealand tax residency by completing a New Zealand tax residence questionnaire (IR886). You only need to include this with your application if you're applying because:

  • your employment or occupation requires you to be overseas, or
  • you're accompanying your partner overseas.

If you'll be away from New Zealand for less than 10 months (325 days), you won't need to complete an IR886 as you'll remain a New Zealand tax resident.

If you're accompanying your partner overseas, you must: 

  • remain a New Zealand tax resident
  • provide proof of your relationship, such as a copy of:
    • your marriage or civil union certificate
    • joint documents such as tenancy agreement, property mortgage, household accounts or bank statements, etc.

Send your written application and any supporting evidence to us at:

Inland Revenue
PO Box 39010
Wellington Mail Centre
Lower Hutt 5045

Individual income return (IR3)

You'll need to file an Individual income return (IR3) at the end of the tax year declaring your overseas income earned. As a New Zealand tax resident you need to declare your worldwide income even if you don't bring it into the country.

Returning to New Zealand to live 

When you've been living back in New Zealand for at least six months, your loan will become interest-free again.

Let us know you're back in New Zealand and the date you returned through your myIR Secure Online Services account.

Any interest charged during these six months will be written off. During these six months you can leave the country for up to 31 days (in total) and still be eligible for interest-free payments.

Once you've returned you may have both an overseas-based and New Zealand-based part-year repayment obligation. This happens when you return during the tax year.