Plain language law

New Zealand law explained for everyone

Student Loan Scheme Act 2011

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

77: Calculation of borrower's end-of-year repayment obligation if salary or wages less than annual repayment threshold

You could also call this:

"How to work out your student loan repayment when you earn less than a set amount"

If you earn money from a job and it's less than a certain amount in a year, this law explains how to figure out how much you need to repay on your student loan. Here's how it works:

First, the government looks at how much money you made from your job in the year. If it's less than a set amount called the 'annual repayment threshold', they use a special calculation.

The calculation uses a formula that looks like this: a = b × (c − d). Don't worry, it's not as complicated as it seems! Here's what each letter means:

'a' is the amount you need to repay for the year. 'b' is the percentage of your income you need to repay. 'c' is all the money you earned in the year, including your job and other income. 'd' is the annual repayment threshold (the set amount mentioned earlier).

After doing this calculation, if the result is zero or less, you don't have to repay anything for that year.

This law helps make sure you only repay what you can afford based on how much you earn.

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 It might be out of date or be missing some parts.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=DLM3180173.

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

76A: Commissioner must assess borrowers to whom section 72(b) applies as having zero repayment obligation, or

"No repayment needed if you meet special conditions"

Next

78: Calculation of borrower's end-of-year repayment obligation where salary or wages equal to or more than annual repayment threshold, or

"How the government works out how much of your student loan you need to pay back each year if you earn enough money"

Part 2Repayment obligations of borrowers
Repayment obligations for New Zealand-based borrowers with income other than, or as well as, salary or wages

77Calculation of borrower's end-of-year repayment obligation if salary or wages less than annual repayment threshold

  1. Subsection (2) applies if, in relation to a tax year,—

  2. this subpart applies to a borrower; and
    1. the gross income that the borrower derived from salary or wages is less than the annual repayment threshold.

      1. The borrower's end-of-year repayment obligation for the tax year must be calculated in accordance with the formula—

        a = b × (c − d)

        Where:

        • a a

          is the borrower's end-of-year repayment obligation for the tax year

        • b b

          is the repayment percentage

        • c c

          is the income that the borrower derives from adjusted net income and from salary or wages for the tax year

        • d d

          is the annual repayment threshold.

      2. If the borrower's end-of-year repayment obligation for the tax year is zero or less, the borrower has no end-of-year repayment obligation for the tax year.

      Notes
      • Section 77: replaced (with effect on 1 April 2012 and applying for 2012–13 and later tax years), on , by section 14 of the Student Loan Scheme Amendment Act 2013 (2013 No 10).