IRD Strengthen Student Loan Recall Power
December 17, 2010 New Zealand Taxation
The IRD will soon enjoy an expanded set of rules under which student’s student loans are able to be recalled in cases of repayment non-compliance.
On December 15th the Revenue Minister Peter Dunne announced a change to national student loan rules, which will allow the Inland Revenue Department (IRD) to recall student loans in occurrences of serious non-compliance by loan-holders.
According to Peter Dunne, there are numerous loan-holders who default on their student loans every year. Such cases are handled by the IRD, who typically provide the individual with options to payback the defaulted loan. However, in extreme cases of non-compliance the Commissioner of Inland Revenue is authorized to recall the entire loan.
The new bill will clarify and greatly expand the instances in which the IRD is able to recall the whole loan. With a clear set of recall powers the IRD will reportedly be able to “better manage cases of serious non-compliance.” Peter Dunne commented on the new rules saying “It’s a fairness issue. The vast majority of borrowers are doing the right thing and repay on time. However others don’t and they can’t be allowed to get away with it.” To prevent any abuse, the bill maintains that the IRD is still only able to exercise the recall powers in extreme cases of non-compliance.
The supplementary bill still needs to be approved by Royal Assent, and is expected to come into power the day following the passing.
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