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Student Loan Scheme Act 2011

Repayment obligations of borrowers - New Zealand-based borrowers' repayment obligations for salary or wages - Commissioner deductions may be used to recover amounts that remain unpaid

49: Commissioner must issue additional deduction rate notice to obtain Commissioner deductions

You could also call this:

“Tax office can take extra money from your pay to fix student loan mistakes”

The Commissioner can get extra money from your pay if there’s been a big mistake in how much was taken out for your student loan. This can happen if your employer, the person who helps with payroll, or you made a mistake. It can also happen if you have unpaid student loan amounts.

To get this extra money, the Commissioner will send out a special notice. This notice will say how much extra needs to be taken from your pay. It will also say how much money needs to be collected in total. The notice will tell some or all of your employers to take out this extra amount until they’ve collected all the money needed.

The extra amount taken from your pay can’t be more than 5% of what you earn.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2494100.

Topics:
Money and consumer rights > Banking and loans Education and learning > Higher education
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48: Time when special deduction rate ceases to apply, or

"When your special student loan repayment rate ends"

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50: Procedures for issue of additional deduction rate notice, or

"How the government tells you and your employer about taking more money from your pay for your student loan"

Part 2 Repayment obligations of borrowers
New Zealand-based borrowers' repayment obligations for salary or wages: Commissioner deductions may be used to recover amounts that remain unpaid

49Commissioner must issue additional deduction rate notice to obtain Commissioner deductions

  1. The Commissioner may obtain Commissioner deductions from a borrower's salary or wages if—

  2. there is a significant under-deduction in relation to the borrower in the current tax year or in any prior tax year that the Commissioner reasonably believes has occurred because of—
    1. an error or omission by the borrower's employer or PAYE intermediary; or
      1. an error or omission by the borrower; or
      2. the borrower has an unpaid amount.

        1. To obtain Commissioner deductions from a borrower's salary or wages, the Commissioner must issue an additional deduction rate notice that—

        2. specifies the additional deduction rate that is to apply to the borrower (in addition to standard deductions and, if applicable, borrower deductions); and
          1. specifies the total amount payable by the borrower at the additional deduction rate; and
            1. requires some or all of the borrower's employers or PAYE intermediaries to make Commissioner deductions at the additional deduction rate until those deductions equal the amount specified in accordance with paragraph (b).

              1. The additional deduction rate specified under subsection (2)(a) must be 5% or less.

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              Notes
              • Section 49(1)(a)(i): replaced (with effect on 1 April 2012), on , by section 19 of the Student Loan Scheme Amendment Act 2012 (2012 No 32).