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Student Loan Scheme Act 2011

Matters of general application and miscellaneous matters - Matters of general application

190: Tax year other than 12 months due to change in balance date

You could also call this:

“When you change your tax date, your loan repayment amount might change”

If you have a student loan and you change your tax balance date, this might affect how your repayment amount is calculated. This is because your income might be counted for a period that’s not exactly 12 months long.

When this happens, the government needs to adjust how they work out if you need to start paying back your loan. They do this by changing the annual repayment threshold. This threshold is the amount of money you need to earn before you have to start making repayments.

To calculate the new threshold, they use a special formula. They take the normal annual repayment threshold, multiply it by the number of days in your income period, and then divide it by 365 (which is the number of days in a year).

This new calculation ensures that the repayment threshold is fair, whether your tax year is longer or shorter than usual because of your change in balance date.

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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=DLM3180382.

Topics:
Education and learning > Higher education Money and consumer rights > Banking and loans
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189: Annual administration fee, or

"You might have to pay a yearly fee for having a student loan"

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191: Limit on repayment obligation for pay period or tax year, or

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Part 5 Matters of general application and miscellaneous matters
Matters of general application

190Tax year other than 12 months due to change in balance date

  1. This section applies if a borrower—

  2. derives adjusted net income; and
    1. that income is for a period other than 12 months as a result of the borrower changing his or her balance date for the purposes of income tax.

      1. For the purposes of calculating the borrower's repayment obligations under subpart 2 of Part 2, the annual repayment threshold is calculated in accordance with the formula—

        a = b × c ÷ 365

        Where:

        • a a

          is the annual repayment threshold calculated in accordance with this section:

        • b b

          is the amount of the annual repayment threshold:

        • c c

          is the number of days in the period.

      Compare
      Notes
      • Section 190(1)(a): replaced (with effect on 1 April 2012 and applying for 2012–13 and later tax years), on , by section 44 of the Student Loan Scheme Amendment Act 2013 (2013 No 10).
      • Section 190(2): amended (with effect on 1 April 2012 and applying for 2012–13 and later tax years), on , by section 44 of the Student Loan Scheme Amendment Act 2013 (2013 No 10).