Repayment holiday
Repayment holidays for overseas-based borrowers
If you are an overseas-based borrower you may be entitled to a repayment holiday of up to three years.
This means that while you're on the repayment holiday you don't have to make any compulsory repayments. However, interest will continue to be charged on your student loan - so it's a good idea to make voluntary repayments to help keep on top of your loan.
Find out if you are eligible for a repayment holiday
If you go overseas you are automatically entitled to a three-year repayment holiday (this applies to borrowers who went overseas after 1 April 2007).
If, as at 1 April 2007, you were already overseas and have kept up to date with your repayment obligations, or had been overseas for less than one year, you are automatically entitled to a three-year repayment holiday. This repayment holiday will have started from 1 April 2007 and you don't need to do anything to receive it. Because you are on a repayment holiday, you will not receive a notice of assessment, starting with the 2008 assessment.
For all other borrowers who were overseas as at 1 April 2007, your entitlement depends on the length of time you have been overseas and if you have kept up to date with your repayment obligations.
The following table will help you work out if you are eligible for a repayment holiday:
| 1 | When did you leave New Zealand? | On or after 1 April 2006 | You are entitled to a repayment holiday of up to three years (this will start from 1 April 2007). |
| Before 1 April 2006. | Go to step 2 | ||
| 2 | Have you met all your student loan repayment requirements as at 1 April 2007? | Yes | You are entitled to a repayment holiday of up to three years (this will start from 1 April 2007). |
| No | You may be entitled to a repayment holiday. This depends on when you left New Zealand. Go to step 3. | ||
| 3 | When did you leave New Zealand? | Between 1 April 2005 and 31 March 2006. | You are entitled to a repayment holiday of up to two years (this will start from 1 April 2007). |
| Between 1 April 2004 and 31 March 2005. | You are entitled to a repayment holiday of one year (this will start from 1 April 2007). | ||
| Prior to 1 April 2004. | You are not entitled to a repayment holiday. |
Repayment holiday for borrowers who have completed the amnesty
If you applied for the student loan amnesty and your application has been accepted, you will be entitled to apply for a three-year repayment holiday:
- once you have met your amnesty repayment obligations, and
- if you are still overseas.
To receive the repayment holiday you must apply for it by contacting us by phone or email (see When to take your repayment holiday entitlement for contact details). You will need to provide the following information:
- your name and IRD number
- your contact details and
- the date you would like your repayment holiday to start
Making repayments while on a repayment holiday
Interest will be continued to be charged on your student loan while you are on a repayment holiday. Therefore it is a good idea to make additional payments to keep on top of your loan. There is no limit to the amount and frequency of these repayments.
Ending a repayment holiday
You can choose to stop your repayment holiday at any point by contacting us. We will work out how much you need to make in repayments while you are an overseas-based borrower. These are based on the size of your loan and are as follows:
| Loan Balance | Annual repayment (base assessment) | Six monthly instalment due 30 September and 31 March |
|---|---|---|
| Under $1,000 | The whole loan balance | half of the loan balance |
| $1,000 - $15,000 | $1,000 | $500 |
| $15,000.01 - $30,000 | $2,000 | $1,000 |
| $30,000.01 and over | $3,000 | $1,500 |
When to take your repayment holiday entitlement
You can choose to stop and restart your repayment holiday any time, up to the total amount of your repayment holiday entitlement. To stop or restart your repayment holiday contact the Student Loan Team.
| Contact us | ||
|---|---|---|
| From NZ | Phone: 03 951 2020 | Fax: 03 951 2216 |
| From overseas | Phone: 64 3 951 2020 | Fax: 64 3 951 2216 |
| nonres@ird.govt.nz | ||
When your repayment holiday is over
Once your repayment holiday is over, and while you continue to be based overseas, you will need to make student loan repayments twice a year.
The size of your repayments will be based on the total amount of your loan balance as at the day after your repayment holiday ends.
Example
Jordan leaves New Zealand on 24 April 2007 and his repayment holiday automatically starts. On 23 April 2010, Jordan is still overseas and his repayment holiday has ended. In late April 2010 Inland Revenue automatically issues an overseas-based assessment for the relevant portion of the 2011 financial year. Jordan's assessment will be due in two equal instalments on 30 September 2010 and 31 March 2011.
Overseas and not part of the repayment holiday or amnesty
If you're an overseas-based borrower and not part of the repayment holiday or amnesty, you will need to make a repayment on your student loan every six months. The amount you have to repay depends on the size of your loan.
Receiving a notice of assessment
If you are overseas-based and on a repayment holiday for the full tax year you will not receive a notice of assessment.
Find out more
Next steps
Date published: 28 May 2008
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