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Student Loan Scheme Act 2011
Repayment obligations of borrowers
New Zealand-based borrowers' repayment obligations for other income
Reduction of deduction rate for borrower with lower repayment obligation
101: Borrower may apply for reduction of deduction rate to reflect lower repayment obligation

Part 1:
Preliminary matters, loan advances, and New Zealand-based and overseas-based borrowers

Preliminary provisions

3Purposes 4Interpretation 5Meaning of unpaid amount 6Application of Act 7Application of Act to bonded scholarships 8Act binds the Crown 8AApplication of provisions of Act

Establishment of student loan

9Purposes of sections 10, 11, 16, and 17 10Loan manager must notify Commissioner of persons who apply for student loan 11Commissioner must confirm information provided by loan manager 12Loan manager must provide copy of loan contract 13Certain information must be disclosed in loan contract 14Student loan establishment fee 15Right to cancel loan contract 16Loan manager must notify Commissioner of borrower's details 16ALoan manager must notify Commissioner of any details held about borrower’s contact person 17Loan manager must transfer loan advance debts to Commissioner for collection 18Commissioner must notify borrowers of loan advances 19Commissioner must inform borrowers about consolidated loan balance 20Borrower must be notified of certain changes to obligations

Determining whether borrowers are New Zealand-based or overseas-based

21Overview of being New Zealand-based or overseas-based 22Meaning of New Zealand-based 23Meaning of overseas-based 24Treatment of partial days

Certain borrowers may be treated as being physically in New Zealand

25Commissioner may treat certain borrowers as being physically in New Zealand 26Method of making application and provision of evidence and information 27Commissioner must notify borrower and specify period or conditions when granting application 27ACommissioner must keep and publish list of charities 27BWhen entity qualifies to be listed as charity 27CApplication by entity to be listed as charity 27DCommissioner may list tax charities even if no application made 27ECommissioner may remove entity’s listing as charity

Borrowers must notify Commissioner of absence from and return to New Zealand

28Borrower to notify Commissioner of absence from New Zealand of 184 or more days 29Borrower to notify Commissioner of return to New Zealand of more than 183 days

Part 2:
Repayment obligations of borrowers

30Borrower's liability to repay consolidated loan balance 31Repayment obligations that apply to New Zealand-based borrowers and overseas-based borrowers 32Interrelationship between subparts 1 and 2

New Zealand-based borrowers' repayment obligations for salary or wages

33Application of this subpart

Standard deductions resulting in significant under-deductions or over-deductions

63Commissioner determines what is significant under-deduction or significant over-deduction 64Standard deductions are full and final unless significant error 65Significant over-deduction identified by borrower 66Commissioner must determine whether significant over-deduction made 67Procedure if significant over-deduction made 68Applicable procedures if significant under-deduction

Commissioner deductions resulting in over-deductions

68ACommissioner over-deduction identified by borrower 68BCommissioner must determine whether Commissioner over-deduction made 68CProcedure if Commissioner over-deduction made

Matters of general application to salary or wage deductions

69Prohibition on applications or declarations to maintain integrity of student loan scheme 70PAYE rules apply to salary or wage deductions 71Salary or wage deductions in addition to income tax withheld

Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages

72Application of this subpart 73Meaning of adjusted net income, Schedule 3 adjustments, and related terms 74Notification of Schedule 3 adjustments 75Extension of time for notification of Schedule 3 adjustments 76Commissioner to assess borrower's end-of-year repayment obligation 76ACommissioner must assess borrowers to whom section 72(b) applies as having zero repayment obligation 77Calculation of borrower's end-of-year repayment obligation if salary or wages less than annual repayment threshold 78Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold 79Payment of end-of-year repayment obligation 80Calculation of terminal payment for tax year 81Due date for terminal payment 82Calculation of interim payments for next tax year 83Commissioner may assess interim payments if information for preceding year not provided 84Due dates for payment of interim payments 85Commissioner's powers in relation to due dates 86Interim payments to be paid in same manner as provisional tax 87Consequence of failure to meet repayment obligations

New Zealand-based borrowers' repayment obligations for other income

88Application of this subpart 88AMeaning of adjusted net income

Assessment of other income repayment obligation

89Commissioner to assess borrower's other income repayment obligation

Calculation of other income repayment obligations

90Calculation of borrower's other income repayment obligation where salary or wages below threshold 91Calculation of borrower's other income repayment obligation where salary or wages equal to or above threshold

Payment of other income repayment obligations

92Payment of other income repayment obligations 93Calculation of remaining repayments for tax year 94Due dates for payment of remaining repayments 95Calculation of interim payments for next tax year 96Commissioner may assess interim payments if information for preceding year not provided 97Due dates for payment of interim payments 98Commissioner's powers in relation to due dates 99Interim payments to be paid in same manner as provisional tax 100Consequence of failure to meet repayment obligations

Reduction of deduction rate for borrower with lower repayment obligation

101Borrower may apply for reduction of deduction rate to reflect lower repayment obligation 102Special deduction rate certificate for lower repayment obligation 103Issue and application of special deduction rate certificate 104Time when special deduction rate ceases to apply

Overseas-based borrowers' repayment obligations

105Application of this subpart 106Meaning of temporary repayment suspension

Temporary repayment suspension of overseas-based repayment obligations

107Borrowers who intend to be overseas-based may apply for temporary repayment suspensions 107AContact person to be nominated 107BGrant of temporary repayment suspension 108Duration of temporary repayment suspension 108ABorrowers who have had, or are having, temporary repayment suspensions under Student Loan Scheme Act 1992

Assessment of overseas-based repayment obligation

109Assessments for years in which borrower is overseas-based

Calculation and payment of overseas-based repayment obligation

110Repayment obligations of overseas-based borrowers 111Exceptions to repayment obligations of overseas-based borrowers 112Repayment to be made by instalments 113Consequence of failure to meet repayment obligations

New Zealand-based non-resident borrowers and borrowers with New Zealand-based and overseas-based repayment obligations

114Notification of Schedule 3 adjustments by New Zealand-based non-resident borrowers 114AExtension of time for notification of Schedule 3 adjustments 115Repayment obligations of borrowers who are overseas-based for part of tax year 115AReassessment of borrower's overseas-based repayment obligations in year of return to New Zealand 116Overseas-based borrowers who derive salary or wages from New Zealand 117Overseas-based borrower's standard and Commissioner deductions satisfy overseas-based repayment obligation

Part 3:
Excess repayments

118Interpretation 119Meaning of excess repayment 120Commissioner must notify borrower of excess repayment 121Options that apply to excess repayments 122Exception to general rule if repayment obligations for prior tax years reassessed

Excess repayment bonus

123Borrower's entitlement to 10% bonus for excess repayment of $500 or more 124Borrower's entitlement to bonus if loan balance is less than $550 125Borrower may be entitled to 10% bonus if under-deduction is due to PAYE system 126Time at which 10% bonus is credited 127Restriction on amount of 10% bonus 128Application of sections 118 to 122 and this subpart to part years 129Consequences of refund or credit to next tax year 130Commissioner must advise borrowers to seek financial advice

Refund of excess repayments and satisfaction of future repayment obligation

131Limit on use of excess repayments 132Borrower may receive refund or apply excess repayment to future repayment obligations

Part 4:
Interest, relief, penalties and offences, rights of objection, and rights to challenge

Interest

133No interest applied to student loans except as specified in this Part

Loan interest charged for all overseas-based borrowers

134Loan interest charged for all overseas-based borrowers 135Loan interest calculated daily and charged and compounded annually 136Notification that loan interest has compounded 137Full interest write-off for New Zealand-based borrowers 138Loan interest written off for quick repayment of consolidated loan balance

Late payment interest

139Late payment interest charged on unpaid amount 140Notification of late payment interest 141Late payment interest reduced if instalment arrangement complied with 141ALate payment interest reduced if deduction or extraction notice applies

Matters of general application to interest

142No interest on consolidated loan balance in credit 143Commissioner's power to correct interest when charged in error

Relief

Different types of relief

144Power of Commissioner in relation to small amounts 145Application for different types of relief for borrower

Relief from late payment interest

146Commissioner may grant relief from late payment interest

Relief from penalties

146ACommissioner may grant relief from penalties

Hardship relief

147Hardship relief for any tax year 148Special deduction rate certificate for hardship relief 149Issue and application of special deduction rate certificate 150Time when special deduction rate ceases to apply 151Effect of Commissioner's decision under section 147 152Borrowers must notify Commissioner of change of circumstances 153Commissioner may review grant of hardship relief

Instalment arrangements

154Application for instalment arrangement

Penalties and offences

Late filing penalties

155Late notification penalty for Schedule 3 adjustments under section 74 156Due dates for payment of late notification penalty

Student loan shortfall penalties

157Definitions relating to student loan shortfall penalties 158Student loan shortfall penalties may be imposed on certain borrowers 159Commissioner may impose student loan shortfall penalties 160Notification and payment obligations if Commissioner imposes student loan shortfall penalty 161Student loan shortfall penalty reduced or removed to reflect change to shortfall penalty

Underestimation penalty

161AUnderestimation penalty where interim payments underestimated as at last interim payment date

Offences

162Certain offence provisions in Tax Administration Act 1994 apply to borrowers 162AOffence for default of overseas-based repayment obligation 162BArrest of liable person 163Offence to prejudice employees because of student loan repayment liability 164Proceedings to be commenced by Commissioner 165Charging document may charge several offences 166Time for filing charging document

Borrower's right to object to loan manager about details of loan advances

167Borrowers may object to details of loan advances 168Loan manager must consider objections 169Power to require objection to be determined by chief executive 170Chief executive must consider objections required to be determined by chief executive 171Right to apply to Disputes Tribunal or District Court 172Notification of Disputes Tribunal's or District Court's decision about objection

Dispute procedures and rights to challenge

Dispute procedures

173Part 4A of Tax Administration Act 1994 applies to disputes under this Act

Rights to challenge and challenge procedures

174Dispute process must be completed before challenge is made 174APart 8A of Tax Administration Act 1994 applies to challenges under this Act 175Challenge to details of consolidated loan balance 176Challenge to decision concerning treating borrowers as being physically in New Zealand 176AChallenge to decision relating to listing of entity as charity 177Challenge to special deduction rate certificate for unused repayment threshold 178Challenge to additional deduction rate notice 179Challenge to determination of salary or wage deduction 180Challenge to decision regarding significant over-deduction 181Challenge to prohibition on applications or declarations 182Challenge to assessments 182AChallenge to decision concerning temporary repayment suspension 183Challenge to interest charged 184Challenge to decision concerning relief 185Challenge to late notification penalty 186Challenge to student loan shortfall penalty 187Person who may make challenge 188Commissioner's decision on challenges

Part 5:
Matters of general application and miscellaneous matters

Matters of general application

189Annual administration fee 190Tax year other than 12 months due to change in balance date 191Limit on repayment obligation for pay period or tax year 192Payment date not otherwise specified 193Recovery of unpaid amount 193AContact person may be requested to assist 193BChanges relating to identity and details of contact person 193CChanges relating to contact details of borrower 194Order in which certain deductions and payments offset against borrower's consolidated loan balance 195Date on which salary or wage deductions and payments treated as being made and credited 195BDate on which final-year fees-free entitlement treated as being credited 196Cancellation of interest if consolidated loan balance repaid early 197Write-off of consolidated loan balance 198Commissioner may remedy incorrect application of Act 199Manner of making refunds 200Appropriation of refunds 201Loan advances and other information may be altered 202Provisions of Tax Administration Act 1994 and Income Tax Act 2007 to apply to this Act

Miscellaneous matters

Interaction with loan contracts and other enactments

203This Act overrides loan contracts 204Commissioner may exercise rights in loan contracts to recall loans 205Loan contract enforceable against minor 206Student loan contracts are not credit contracts

Disclosure of information

207Disclosure of information between authorised persons 208Disclosure of information between Inland Revenue Department and New Zealand Customs Service for information-matching purposes 209Power of Commissioner to access arrival or departure information 209ADisclosure of information to Australian Taxation Office in relation to borrowers who are, or may be, overseas-based

Informing and notifying under this Act

210Meaning of inform 211Meaning of notify 212Meaning of notify a person in writing 213Meaning of formally notify 214Notice requirements of Tax Administration Act 1994 do not apply

Regulations

215Regulations 216Transitional regulations 217Application of Legislation Act 2012

Savings and transitional provisions

218Transitional provisions concerning loan manager and loan advances 219Early applications and issue of certificates for transition to this Act 220Application, savings, and transitional provisions

Consequential amendments and repeals

221Amendments to this Act 222Amendments to Student Loan Scheme Act 1992 and Credit Contracts and Consumer Finance Act 2003 223Amendments to other Acts 224Amendments to other enactments 225Student Loan Scheme Act 1992 repealed 226Regulations revoked

Schedule 1:
Conditions to borrower being treated as being physically in New Zealand

Schedule 2:
Application of PAYE rules for purposes of section 70

Schedule 3:
Adjustments to net income for purposes of section 73, applying from 1 April 2014 for 2014–2015 and later tax years

Schedule 4:
Application of provisional tax rules for purposes of section 86

Schedule 5:
Transitional provisions concerning loan manager and loan advances

Schedule 6:
Application, savings, and transitional provisions

Schedule 7:
Amendments to this Act

Schedule 8:
Amendments to Student Loan Scheme Act 1992 and Credit Contracts and Consumer Finance Act 2003

Schedule 9:
Amendments to other Acts

Schedule 10:
Amendments to other enactments

Student Loan Scheme Act 2011

Repayment obligations of borrowers - New Zealand-based borrowers' repayment obligations for other income - Reduction of deduction rate for borrower with lower repayment obligation

101: Borrower may apply for reduction of deduction rate to reflect lower repayment obligation

You could also call this:

"You can't ask to lower your student loan payments anymore"

Illustration for Student Loan Scheme Act 2011

This law used to be about how you could ask to lower the amount taken from your pay for your student loan. However, this part of the law no longer exists. It was removed on 12 April 2012, which means it doesn't apply anymore. The government decided to take this rule out of the Student Loan Scheme Act 2011. If you want to know about the current rules for student loan repayments, you'll need to look at other parts of the law that are still in effect.

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This page was last updated on 5 April 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2652600.

Topics:

Education and learning > Higher educationMoney and consumer rights > Banking and loans

100: Consequence of failure to meet repayment obligations, or

"What happens if you don't pay your student loan back on time"

102: Special deduction rate certificate for lower repayment obligation, or

"You can't get a special rate to pay less on your student loan anymore"

Part 2Repayment obligations of borrowers
New Zealand-based borrowers' repayment obligations for other income: Reduction of deduction rate for borrower with lower repayment obligation

101Borrower may apply for reduction of deduction rate to reflect lower repayment obligation (Repealed)

Notes

Section 101: repealed (with effect on 1 April 2012), on 12 April 2012, by section 29 of the Student Loan Scheme Amendment Act 2012 (2012 No 32).