Mr Robert McKenzie
[FYI request #9140 email]
Dear Mr McKenzie
Thank you for your request made under the Official Information Act 1982 (OIA) received
on 27 November 2018. You requested the following:
Why does the IRD take a partners
(sic) income details in terms of its’ bizarre
hardship applications overseas when onshore a student loan debtors partners
income is irrelevant?
ie an onshore stay at home parent with a student loan is exempt from paying
even if their partner is earning?
Why is there a different rule for a stay at home parent overseas with a student
Why would, for instance an Australian husband married to a NZ student loan
borrower be in debt to the IRD for his stay at home wife’s very old NZ student
How would this even stand up in an Australian court if legal action was taken?
Considering the loan is over 20 years old?
Section 30(1) of the Student Loan Scheme Act 2011 (the Act) requires that each borrower
must repay his or her consolidated loan balance in accordance with the Act and the loan
contract. However, section 147 of the Act sets out the Commissioner of Inland Revenue’s
discretion to grant hardship relief. Section 147 of the Act states:
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) 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.
While the obligation to repay a student loan lies with the individual borrower, when
considering applications for hardship relief your scenario is incorrect. Before the
Commissioner can be satisfied that a person is in a position of hardship, she will require
verification of a person’s current financial situation, including household family income.
This will determine a person’s ability to make repayments. This is regardless of whether
the person resides in New Zealand or overseas, or the age of the debt.
For your information, a Standard Practice Statement (SPS) setting out Inland Revenue’s
practice for providing relief from payment of student loan repayment obligations can be
found here: https://www.ird.govt.nz/technical-tax/standard-practice/returns-debt/sps-
Thank you for your request.
Kaylynne Bell Group Lead, Customer and Compliance Services, Individuals