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# Repayment obligations for overseas-based borrowers

Find out what you need to repay and how to make a payment if you're an overseas-based borrower

Flash video | 1:25 min

### What you need to repay while overseas from 1 April 2014

If you're overseas your repayment obligation for the tax year will be based either on:

• your loan balance at the date you became overseas-based, or
• your loan balance as at 31 March of the previous tax year/s from when you left, whichever is the greater.

If you're overseas as at 31 March 2014 and remain as such, then your repayment obligation will be based on your loan balance as at that date plus the annual administration fee.

Your repayment obligation will be set as a minimum amount until the loan is repaid or you become NZ based again. Your repayment obligation will no longer decrease as your balance reduces. However, it will increase if your loan balance increases.

The following table shows what your full-year overseas-based repayment obligation will be:

If your total loan balance is ... then the amount you need to pay is ...
under \$1,000 your whole loan balance.
\$1,000 and up to \$15,000 \$1,000.
over \$15,000 and up to \$30,000 \$2,000.
over \$30,000 and up to \$45,000 \$3,000.
over \$45,000 and up to \$60,000 \$4,000.
over \$60,000 \$5,000.

##### Example

John became overseas-based in December 2013. His loan balance was \$46,000 and with his repayments, this reduced to \$44,000 by 31 March 2014. For the 2015 tax year (1 April 2014 - 31 March 2015) John's fixed minimum repayment obligation will be \$3,000 which is based on his loan balance as 31 March 2014.

John doesn't make any repayments during the tax year and with interest charges, his loan balance increases to \$46,500 by 31 March 2015.

Because John's loan balance at 31 March 2015 is greater than his loan balance on 31 March 2014 his fixed minimum repayment obligation has increased to \$4,000.

Your repayments are generally due in two equal instalments on 30 September and 31 March. However, if a standard due date has passed by the time we issue your overseas-based repayment obligation we may give you more time to pay. You can pay each instalment in a lump sum or make payments as often as you like during the year. You must have paid the amounts in full by their due dates or you may have to pay late payment interest (formerly late payment penalty).

Your overseas-based repayment obligation is the minimum amount you must pay to meet your obligations. Based on the size of your loan, it may not be enough to cover the loan interest charged.

It’s important that you keep your repayments up to date. We match information with New Zealand Customs so we’re notified when student loan borrowers who have fallen behind on their repayments are travelling to New Zealand. We use this information to contact the borrower to discuss their student loan and make arrangements to repay their loan arrears, or pursue other collection processes.

### If you’re significantly behind on your repayments

If you're significantly behind on your repayment obligation and you haven't talked to us recently about your loan repayments you may be stopped from leaving New Zealand next time you come home for a visit.

If you are uncertain, or concerned that this may apply to you, you should contact us as soon as possible. We can work with you to arrange a repayment plan that will suit your situation and get you back on track with your loan.

### Part-year overseas-based repayment obligations

In the year that you leave or return to New Zealand, you may have both a New Zealand-based and an overseas-based part-year repayment obligation. This can happen when you:

• left New Zealand during the tax year and you're not on a repayment holiday
• returned to New Zealand and became New Zealand-based during the tax year.

You may also have a part year overseas-based repayment obligation if your repayment holiday ends part way through the tax year.

The amount you need to pay will be a proportion of the yearly amount. However, if your total loan balance is less than \$1,000 you’ll need to pay the full amount.

##### Example - Overseas-based part year repayment obligations

Fiona's repayment holiday ends on 31 December. The tax year ends on 31 March.

Fiona's loan balance is \$10,000 which means her full year overseas-based repayment obligation would normally be \$1,000.

Her part-year obligation is calculated as follows:
\$1,000 divided by 365 (days in the tax year) x 90 (days not on a repayment holiday) equals \$245.57
Fiona's repayment obligation of \$245.57 is calculated for the 90 days of the tax year that she's no longer on a repayment holiday.

In the year you leave New Zealand, we’ll issue you with an overseas-based repayment obligation once you’ve been away for 184 days or more. Because one or both of the standard due dates (30 September and 31 March) may have passed, we may give you more time to pay. The new due date will be shown on your overseas-based repayment obligation notice.

##### Example - one standard due date passed

John leaves New Zealand on 1 June 2014 without applying for a repayment holiday. On 10 December 2014 (184 or more days after he left) we issue John’s 2015 overseas-based repayment obligation (this will be a part-year obligation). As this is after the first due date of 30 September, his first instalment will be due on 8 February 2015. His second instalment will be due on 31 March 2015 (standard due date).

##### Example - both standard due dates passed

Hannah leaves New Zealand on 31 October 2013 without applying for a repayment holiday. On 5 May 2014 (184 or more days after she left) we issue Hannah’s 2014 overseas-based repayment obligation (this will be a part-year obligation). As this is after both due dates (30 September and 31 March) both her instalments will be due on 4 July 2015.

If your first due date is within 30 days of your second due date we’ll make both instalments due at the same time.

In the year you return to New Zealand, your existing overseas-based repayment obligation will become a part-year obligation when you’ve been back for 183 days or more or when you contact us to confirm you intend to become New Zealand-based.

### Part-year New Zealand-based repayment obligations

In the year that you leave or return to New Zealand, you may need to file an IR3 return of income if you have adjusted net income. We'll calculate and send you your New Zealand-based student loan end-of-year repayment obligation based on your income from your part-year return.

### What you need to repay while overseas for the 2014 tax year or earlier

If you’re overseas for the full tax year, your repayment obligation for the 2014 or earlier tax years was based on your total loan balance as at 31 March plus the annual administration fee. The following table shows your full-year overseas-based repayment obligation until 31 March 2014:

If your total loan balance is ... then the amount you need to pay is ...
under \$1,000 your whole loan balance.
\$1,000 and up to \$15,000 \$1,000.
over \$15,000 and up to \$30,000 \$2,000.
over \$30,000 \$3,000.

### Repayment codes if you're working for New Zealand salary or wages

If you come back to New Zealand and earn salary or wages or you continue to earn New Zealand salary or wages while you're overseas, you must use a student loan (SL) repayment code so that your employer deducts the right amount of student loan repayments.

From 1 April 2013 repayments deducted from your salary and wages are considered your final obligation on this income. This means you'll no longer be able to use the repayments deducted from your salary or wages against your overseas-based repayment obligation.

Before 1 April 2013 if you were only back for a short period and were still overseas-based (ie, your time in New Zealand was less than 183 days), the repayments deducted from your salary or wages could be used to pay your overseas-based repayment obligations. However if you became New Zealand-based again, the deductions you have paid became final on your salary or wage income.