7 October 2013
Mr Craig Ryan
[FYI request #1110 email]
Dear Mr Ryan
The Minister of Revenue transferred your Official Information Act request of 5 September
2013 to Inland Revenue, and we received it on 9 September 2013. You requested the
following, in relation to the proposed “arrest at border” process for student loan defaulters:
I would like to know the process of who orders the arrest warrant, what the
charge or offence is?
Also how wil the process proceed?
In the event that the alleged criminal is unable to pay, will they be incarcerated in
a New Zealand prison until they can pay?
What will the penalty or sentence be?
After the sentence is served, wil the convicted criminal stil be liable for the
outstanding debt?
What are the human rights implications of this new legislation regarding the
arrest at border of defaulters of Student loans.
The “arrest at border” provisions are in the Student Loan Scheme Amendment Bill (No. 3),
which is not yet law. This bil is available on the www.legislation.govt.nz website, and the
associated commentary can be found at www.taxpolicy.ird.govt.nz/publications/2013-
commentary-sls-3/overview.
Each of your questions is answered below.
I would like to know the process of who orders the arrest warrant, what the charge or
offence is?
Before an arrest warrant is requested, borrowers will be given multiple opportunities to
discuss their situation. If a borrower genuinely cannot afford to make repayments,
there are a number of options that can be discussed with the borrower, such as
hardship relief and instalment arrangements. It is in a borrower’s best interests to get
in touch with Inland Revenue early to discuss their situation.
It wil be an offence for a borrower who is in default of their overseas-based repayment
obligation and who, having been notified by the Commissioner that they are in default,
to knowingly fail, or refuse, to make reasonable efforts to pay or to make
arrangements to pay.
A District Court judge issues the arrest warrant upon written application by the
Commissioner of Inland Revenue. When issuing the warrant, the judge has to be
satisfied that the borrower has committed the above offence and is about to leave or
will attempt to leave New Zealand.
Also how wil the process proceed?
The New Zealand Police may stop the borrower at the border and execute the arrest
warrant as the borrower attempts to leave the country.
The arrested person must be brought as soon as possible before a District Court, which
may make the fol owing orders:
an order that the person must give security for the payment of the debt
an order that the person must not leave New Zealand without the written
permission of the court
an order that the liable person must surrender to the court any travel
documents or tickets in the person’s possession
any other order the court sees fit to make.
If a person attempts to leave New Zealand without the written permission of the court
or breaches the order, that person must surrender any travel document. They have
committed an offence and are liable on conviction to imprisonment for a term not
exceeding three months or to a fine not exceeding $2000.
In the event that the alleged criminal is unable to pay, will they be incarcerated in a New
Zealand prison until they can pay?
No. As noted earlier, a borrower who cannot afford to meet their repayment obligation
may apply for an instalment arrangement or hardship under our existing provisions,
meaning that the repayment obligation may be reduced.
What will the penalty or sentence be?
See answers above.
After the sentence is served, will the convicted criminal still be liable for the outstanding
debt?
Yes. Whether or not a person is convicted and a fine or imprisonment is imposed, the
borrower remains liable for the outstanding debt.
What are the human rights implications of this new legislation regarding the arrest at border
of defaulters of Student loans?
Every bil is scrutinised before it is introduced for consistency with the Bill of Rights Act
1990 (BORA), a process called BORA vetting. Advice is provided to the Attorney
General by the Ministry of Justice.
In this case, the Ministry of Justice’s conclusion was that the bil appears to be
consistent with the rights and freedoms affirmed in the Bil of Rights Act. The ful
transcript of the legal advice provided can be found here:
www.justice.govt.nz/policy/constitutional-law-and-human-rights/human-rights/bill-of-
rights/student-loan-scheme-amendment-bil -no-3
This response fully covers the information you requested. I trust it is of assistance to you.
Yours sincerely
Maurice Lawlor
Business Owner
