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Student Loan Scheme Amendment Act 2007

Information match between Customs and Inland Revenue

Information-matching will be undertaken between Inland Revenue's student loan information and the border-crossing information held by the New Zealand Customs Service to establish borrowers' entitlement to interest-free student loans.

Inland Revenue's access to Customs' arrival and departure information

Inland Revenue will have ad hoc access to any recording system used by Customs to store arrival or departure information.

Extending the amnesty on student loan penalites

An amnesty on student loan penalties was introduced by the Student Loan Scheme Amendment Act 2005. The amnesty allowed non-resident borrowers in arrears the chance of a fresh start by having their penalties cancelled.

Simplifying the law on which repayment rules apply

To simplify the law on which set of repayment rules apply - those for borrowers based in New Zealand or those for borrowers based overseas - annual repayment obligations will be based on whether the borrower is eligible for an interest-free loan, rather than on where they are tax-resident.

New repayment rules for overseas-based borrowers

New repayment rules have been introduced for borrowers who are based overseas.

Interest-free loans for borrowers studying full-time overseas as undergraduate level

The Commissioner has been given the ability to grant borrowers studying full-time overseas at undergraduate level an interest-free loan.

Removal of interest write-offs for borrowers ineligible for interest-free loans

Interest write-offs for borrowers ineligible for interest-free loans have been abolished.

Exemptions for volunteers

A new provision has been added to the Student Loan Scheme Act to specify the activities which may be engaged in by borrowers seeking an exemption from the requirement that they be New Zealand-based to qualify for an interest-free loan.

Late payment penalties

The late payment penalty rate has been reduced to 1.5 percent.

Small balances

The small balance thresholds have been increased to $20 and a new provision has been introduced which allows Inland Revenue to refrain from collecting all or part of an overdue repayment obligation that is less than $333..

Applications in writing

The requirement that applications for relief from penalties or payment of a repayment obligation on hardship grounds could only be made in writing has been removed.

Hardship relief

The hardship provisions have been amended to allow hardship relief for any amount which has already been paid.

Care and management

The care and management provisions in the Tax Administration Act have been extended to include student loan interest.

Interest write-offs validated

Borrowers who had an interest write-off to which they were not entitled, but had repaid their loans by 13 November 2006, will not have the write-off reversed.

Interest rate formula

From the 2008-09 tax year separate components of the student loan interest rate will no longer be set.

Other technical amendments

The borrower has six months from being notified by the Commissioner of the difference in the assessed repayment obligations to claim a refund.