Plain language law

New Zealand law explained for everyone

Student Loan Scheme Act 2011

Repayment obligations of borrowers - New Zealand-based borrowers' repayment obligations for salary or wages - Salary or wage deductions

40: Deductions from main benefits

You could also call this:

“Special rules for taking student loan payments from your main benefit”

If you get a main benefit and it’s more than a certain amount, special rules apply to how deductions are made for your student loan.

The chief executive can’t take money directly from your main benefit to pay your student loan. Instead, they work with the Commissioner to decide how much should be deducted.

If they decide not to deduct anything, some other rules about deductions don’t apply to you.

This rule is more important than some other rules about deductions.

In this law, ‘equivalent gross amount’ means the total of your main benefit plus any money paid to the Commissioner for income tax on that benefit.

A ‘main benefit’ is defined in another law called the Income Tax Act 2007.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

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=DLM3180108.

Topics:
Education and learning > Higher education Money and consumer rights > Banking and loans
Previous

39: Employer or PAYE intermediary must make borrower deductions from salary or wages, or

"Your boss can take extra money from your pay to help pay off your student loan if you ask them to"

Next

41: Definitions relating to repayment thresholds, or

"Words that explain when you need to start paying back your student loan"

Part 2 Repayment obligations of borrowers
New Zealand-based borrowers' repayment obligations for salary or wages: Salary or wage deductions

40Deductions from main benefits

  1. This section applies if—

  2. a borrower receives a main benefit for a pay period; and
    1. the equivalent gross amount of that main benefit exceeds the pay period repayment threshold (calculated in accordance with section 37(4)) for that pay period.

      1. The chief executive—

      2. must not make a salary or wage deduction from the main benefit; and
        1. must make a deduction from the main benefit of an amount determined by the Commissioner in consultation with the chief executive.

          1. If the amount of the deduction determined under subsection (2)(b) is zero, then sections 34 and 35 do not apply.

          2. This section overrides sections 36(2), 38, and 39.

          3. In this section,—

            equivalent gross amount means the sum of—

            1. the amount of a main benefit; and
              1. any amount that was paid to the Commissioner in accordance with sections 349, 350, 351, and 352 of the Social Security Act 2018 for income tax payable on that main benefit

                main benefit has the same meaning as in section YA 1 of the Income Tax Act 2007.

                Compare
                Notes
                • Section 40 heading: amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(1)(a): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(1)(b): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(2)(a): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(2)(b): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(2A): inserted (with effect on 1 April 2012), on , by section 15 of the Student Loan Scheme Amendment Act 2012 (2012 No 32).
                • Section 40(4) equivalent gross amount paragraph (a): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(4) equivalent gross amount paragraph (b): amended, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(4) equivalent gross amount paragraph (b): amended, on , by section 459 of the Social Security Act 2018 (2018 No 32).
                • Section 40(4) income-tested benefit: repealed, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                • Section 40(4) main benefit: inserted, on , by section 142 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).