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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 24150
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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I recently moved back to NZ and as expected was

Customer Question

Hi, I recently moved back to NZ and as expected was automatically taxed from my income an amount ($10,000 per year) to go straight to my student loan. What I did not expect was the fact that after speaking with an IRD representative they proceeded to tell me that the outstanding amount in overseas penalty rates of $8,700 needs to be paid within 24 months. This is on top of the $10,000 per year they are taking from me automatically from my salary. I was told that if we did not come to a repayment agreement that they would take it from my salary. I don't believe that this is legal (taking two payments), and to take $14,400 from someones salary for 2 years is too much. I would accept repayments of $10,000 per year for 4 years of which would clear my loan. Advice on this matter is greatly appreciated. Regards, Daniel
JA: What state are you in? It matters because laws vary by location.
Customer: New Zealand.
JA: Has anything been filed or reported?
Customer: Not sure what you mean?
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 11 months ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 11 months ago.

Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today.

Expert:  Chris The Lawyer replied 11 months ago.

Unfortunately Inland Revenue do have the power to deduct directly from your wages. You can challenge the decision, particularly if you could show that this was going to cause you hardship. Inland Revenue have considerable power given to them under the student loan legislation, but I need to be fair in the process.

Expert:  Chris The Lawyer replied 11 months ago.

Under the Student Loan Scheme Act you can apply for hardship relief, but this applies in each tax year. So you would need to make a case that the additional deductions would cause hardship in terms of the section which I cite for your assistance

147 Hardship relief for any tax year

(1) If an application is made under section 145(1)(b) for hardship relief, the Commissioner may, for any period the Commissioner considers equitable, decrease a borrower’s repayment obligation if the Commissioner—

(a) is satisfied that payment of that repayment obligation is causing, or would cause, serious hardship to the borrower; or

(b) considers that there are other special reasons that make it fair and reasonable to do so.