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Digest No. 1961

Student Loan Scheme Amendment Bill 2011 (2012 No 326-2)

Date of Introduction: 07 September 2011
Portfolio: Revenue
Select Committee: Finance and Expenditure
Date report presented: 13 March 2012
Published: 27 March 2012by John McSoriley BA LL.B, BarristerLegislative AnalystP: (04) 471-9626 (Ext. 9626) Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.

Purpose

The main aim of the Bill is to amend the Student Loan Scheme Act 2011 (the Act) to:

  • exclude losses from the calculation of income for student loan repayment purposes;

  • extend the pay-period assessment policy to the salary and wage earnings of all borrowers;

  • allow the Inland Revenue Department to obtain details of a contact person from the loan manager;

  • shorten the repayment holiday from three years to one year;

  • require borrowers to apply for a repayment holiday; and

  • require borrowers to supply details of an alternative contact person residing in New Zealand, before going overseas, or before the expiry of six months after date of departure [1]   .

The Bill as introduced is described in Bills Digest No 1926.

Main Provisions

Offsetting

The bar-2 makes provision for the offsetting of a significant over-deduction against an unpaid amount before being refunded (Part 1, amending Clause 12 by substituting subclause (2A)).

Communication with, and details of, a contact person

The bar-2 Bill provides that the Commissioner of Inland Revenue may notify an individual of that fact when they are nominated as a contact person for a borrower rather than only having power to contact the nominated person when the borrower is in default. The bar-2 Bill also requires a borrower to notify the Commissioner whenever there is a change in the details of the contact person named in their loan application, and to provide new contact details if the contact person dies or becomes incapacitated or is unwilling to act as the borrower’s contact person (Part 1, Clause 29, inserting New Sections 193A and 193B into the Act).

Calculation of interest

The bar-2 Bill provides that that loan repayments are treated as being received on the day after payment is made to ensure that interest is imposed on outstanding loan balances up to and including the date of payment (Part 1, amending Clause 29A).

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  1. Student Loan Scheme Amendment Bill, 2011 No 326-1, Explanatory note, General policy statement, pp. 1 and 2.   [back]