The Student Loan Scheme Amendment Bill (No. 3), introduced in August 2013, passed its final stages in Parliament today.
The new legislation includes tougher measures to deal with student loan borrowers who persistently refuse to make repayments and introduces higher repayment obligations for overseas-based borrowers to assist them to pay off their loans sooner.
Overseas-based borrowers are responsible for 80 per cent of all overdue loan repayments.
â€śThe reality is that a minority of borrowers, who are mainly overseas-based, do not accept the responsibility to repay their loan, despite having the financial ability to do so,â€ť Revenue Minister Todd McClay says.
â€śThe new rules will give Inland Revenue the ability to seek an arrest warrant to deal with the most serious cases when all other efforts to persuade the borrower to make repayments have failed.â€ť
Overseas-based borrowers with loan balances over $45,000 will also have their repayment rates increased. This brings them into line with the repayment obligations for New Zealand-based borrowers.
The new rules will apply from 1 April this year for the 2014â€“15 tax year.
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