1562 Student Loan Scheme Amendment 1996, No. 68

(1)

1562 Student Loan Scheme Amendment 1996, No. 68

ANALYSIS

Tide 1. Short Tide 2. Interpretation

3. PAYE rules of Income Tax Act 1994 to apply to repayment deductions 4. Interest adjustment in respect of credit

balances 5. Interest statement 6. Late payment penalties

7. No liability in respect of small amounts of penalty

8. Relief from penalty 9. Heading to Part V amended

10. Challenge to assessment of repayment obligation

11. Challenge to amount of interest charged 12. Challenge to penalty

13. Challenge to assessment of repayment deduction

14. Challenge to penal repayment obligation

15. Disputant

16. New sections inserted

69A. Application of Parts IV A and VIllA of Tax Administration Act 1994

69B. No right of challenge to interest payable under loan contract

17. Repeal of sections

18. Offences in respect of repayment deductions

19. Penalties for offences in respect of repayment deductions

20. Other offences

21. Officers and employees of corporate bodies

22. Penal charge for default in repaying repayment deduction

23. Application of repealed provisions of Tax Administration Act 1994

1996, No. 63

An Act to amend the Student Loan Scheme Act 1992 [26 July 1996 BE IT ENACTED by the Parliament of New Zealand as follows:

1. Short Tide-This Act

may

be cited as the Student Loan

Scheme Amendment Act 1996, and shall be read together with and deemed part of the Student Loan Scheme Act 1992 (in this

Act referred to as the principal Act).

2. Interpretation-{I) Section 2 of the principal Act is

(2)

1996, No. 63 Student Loan Scheme Amendment 1563 " 'Challenge', for the purposes of Part V of this Act, has the me~ given to it in section 3 (1) of the Tax Administratlon Act 1994:".

(2) This section comes into force on the 1st day of October 1996.

S. PAYE rules of Income Tax Act 1994 to

aPt>ly

to repayment deductions-(I) Section 25 (2) of the pnncipa! Act is amended by omitting the expression "sections 194 and 206", and substituting the expression "sections 143A (1) (d) and (e) and 143B (1) (d), and Part IX (except section 146)".

(2) This section comes into force on the 1st day of April 1997.

4. Interest adjustment in respect of credit balances-(1) Section 42 of the principal Act is amended by repealing subsection (4), and substituong the following subsection:

"(4) Nothing in this section limits the application of section 120 of the Tax Administration Act 1994 (as in force before the enactment of the Tax Administration Amendment Act (No. 2)

1996),-"(a) Where it applies by virtue of section 36 (2) of the Tax Admirustration Amendment Act (No. 2) 1996; and "(b) Which is to be construed as

if-"(i) References in that section to a 'competent objection' were references to a challenge a borrower is entitled to make under Part VIllA of the Tax Administration Act 1994 as it applies by virtue of

Part V of this Act; and

"(ii) The proviso to section 120 (1) of the Tax Administranon Act 1994 read 'Provided that where the amount of the disputed repayment obligation that has been paid is less than $100 no interest shall be payable under this section.'; and

"(iii) All other changes necessary to give effect to

this section were made."

5. Interest statement-(I) Section 43 (2) of the principal Act is amended by omitting the words "on objection", and substituting the words "by proceedings under Part VIllA of the Tax Administration Act 1994".

(3)

1564 Student Loan Scheme Amendment 1996, No. 68 6. Late payment penalties-( 1) The principal Act is amended oy repealing section 44, and substituting the following section:

"44. (1) A borrower is liable to pay a late payment penalty if the borrower does not pay by the due

date-"(a) Any part of a terminal repayment obligation; or

"(b) Any part of an instalment of an interim repayment; or "(c) Any part of a non-resident repayment obligation; or "(d) Any amount, being a loan balance or interest, that is

payable as a result of a demand made under a loan contract.

"(2) The late pa~ent penalty the borrower is liable to pay under subsection (1) of this section

is-"(a) 2% of the amount of the default; and

"(b) 2% of the amount of the default as at each day that falls 1 month after the day on which a penalty is imposed under paragraph (a) of this subsection or under this paragraph.

"(3) For the purposes of this section-" 'Amount of the default' means:

"(a) In respect of a tenninal repayment obligation, the amount of the terminal repayment obligation not paid by the due date:

"(b) In respect of an interim repayment, the amount that IS the smallest

of-"(i) The difference between 105% of the residual repayment obligation for the immediately preceding income year and the amount of mterim repayments made; and

"(ii) The difference between the residual repayment obligation for the income year and the amount of interim repayments made; and

"(iii) The difference between the amount of the interim repayment last notified by the Commissioner as due by the third instalment date and the amount of the interim reJ>ayments made:

"(c) The amount of any instalment of an interim repayment due after the third instalment date not paid by the due date:

"(d) In respect of a non-resident repayment obligation, the amount of any non-resident :epayment obligation not paid by the last day of the

(4)

1996, No. 63 Student Loan Scheme Amendment 1565 and includes the ammmt of any late payment penalty payable under this section:

"'Due date'

means-"(a) For a terminal repayment obligation, the date specified in Schedule 13 to the Income Tax Act 1994 or any later date specified in the notice of assessment: "(b) For any instalment of an interim repayment due on or before the third instalment date, the date specified in Schedule 13 to the Income Tax Act 1994 as the date for payment of the third instalment:

"(c) For any instalment of an interim repayment due after the third instalment date, the date specified in the notice of assessment as the due date:

"(d) For a non-resident rer,ayment obligation, the last day of the income year. '

(2) This section applies to any amount due on or after the 7th day of February 1996.

7. No liability in res~ct of small amounts of penalt}'-(1) Section 52 of the pnncipal Act is amended by insertmg, after subsection (2), the following subsection:

"(3) This section applies only to borrowers' obligations under this Act."

8. R.elief from penalty-(I) Section 53 of the principal Act

is amended by inserting, after subsection (3), the following subsection:

"(4) This section applies only to borrowers' obligations under this Act."

9. Heading to Part V amended-( 1) The principal Act is

amended by repealing the heading to Part V, and substituting the following heading:

"PART V

"CHA.u.ENGES AFrER TRANSFER OF LOAN BALANCE TO COMMISSIONER"

(5)

1566 Student Loan Scheme Amendment 1996, No. 63

10. Challenge to assessment of repayment oblirdon-(1) Section 64 of the principal Act is amended by omItting the words "object to", and substituting the word "challenge".

11. Challenge to amount of interest cbarged-(I) Section 65 of the principal Act is amended

bl

omittinR the words "object to", and substituting the word' challenge.

(2) This section comes into force on the 1st day of October

1996.

12. Challenge to penalty-( 1) Section 66 of the principal Act is amended by omittIng the words "object to", and substituting the word "challenge".

1996.

IS. Challenge to assessment of repayment deduction-(1) Section 67 of the principal Act is amended by omitting the words "object to", and substituting the word "challenge".

1996.

14. Challenge to penal repayment obligation-( 1) The principal Act is amended by repealing section 68, and substituting the following section:

"68. (1) Any borrower who is assessed under section 85 of this Act with a penal repayment obligation

may,-"(a) On the ground the borrower is not chargeable with the amounts so assessed; or

"(b) On the ground that the amount so assessed is excessive having regard to either or both

of-"(i) The nature and degree of the act or default in respect of which the assessment was made; or

"(ii) The reason for the imposition of the penal repayment

obligation,-challenge the assessment.

"(2) A challenge may be made under subsection (1) of this section notwithstanding that the amount of the assessment is not in excess of treble the amount of the deficient repayment obligation. "

(6)

1996, No. 63 Student Loan Scheme Amendment 1567 15. Disputant-(I) Section 69 of the principal Act is amended by omittinR' the words "An objection", and substituting the words A challenge".

16. New sections inserted-(I) The principal Act is amended by inserting, after section 69, the folloWIng sections:

"69A. Application of Parts IV A and VIllA. of Tax

Administration Act 1994-(1) Parts IVA and VIllA of the Tax

Administration Act 1994 apply with respect to every notice of assessment or reassessment ISsued by the Commissioner under this Act on or after the 1st day of October 1996.

"(2) Subsection (1) does not apply to any notice of

reassessment issued by the Commissioner under this Act on or

after the 1st day of October 1996, if, before that date, the

person who has been assessed has made a competent objection

to a notice of assessment that precedes the notice of

reassessment.

"69B. No right of challenge to interest payable under loan contract-Nothing

in-"(a) Parts IV A and VIllA of the Tax Administration Act 1994; or

"(b) This

Act-confers a right to challenge the rate of interest charged under a loan contract."

17. Repeal of sections-( 1) The principal Act is amended by repealing sections 70 to 76.

(2) Notwithstanding subsection (1) of this section, sections 70 to 76 of the principal Act continue to apply as if they had not been repealed to every notice of assessment or

reassessment-(a) Issued by the Commissioner under the principal Act before the 1st day of October 1996; or

(b) Referred to in section 69A (2) of the principal Act (as inserted by section 16 of this Act).

(3) The Commissioner may, with the written agreement of a person who has been assessed for a liability or obligation under the principal Act, specify that a notice of assessment or

reassessment-(a) Issued before the 1 st day of October 1996, is to be treated as if it had been issued after that date (in which case

(7)

1568 Student Loan Scheme Amendment 1996, No. 68 the provisions of Parts IV A and VIllA of the Tax Administration Act 1994 are to apply to the notice): (b) Issued on or after the 1st day of October 1996, is to be treated as if it had been issued before that date {in which case the provisions of sections 70 to 76 of the principal Act (as in force before the enactment of this section) are to continue to apply to the notice). (4) This section comes into force on the 1st day of October 1996.

18. Offences in respect of repayment deductions-(1) Section 77 deductions-(1) of the principal Act is

amended-(a) By omitting the words "every person commits", and substituting the words "every borrower commits": (b) By repealing paragraphs (a), (b), and (c):

(c) By omitting from paragraph (d) the words ", or wilfully fails to supply information to the Commissioner as required by section 24 of this Act,":

(d) By omitting from paragraph (e) the words "or negligendy fails to supply information to the CommisslOner as required by section 24 of this Act",

(2) Section 77 (2) and (3) of the principal Act are repealed. (3) This section applies with respect to the 1997-98 income year and subsequent years.

19. Penalties for offences in resJ'Cct of repayment deductions-(I) Section 78 of the prinCIpal Act is

amended-(a) By repealing subsection (I):

(b) By omitting from subsection (2) the words "Every person who commits an offence against section 77 (l Xa) or section 77 (1){c) or section 77 (IXd) of this Act", and substituting the words "Every borrower who commits an offence against section 77 (1)(d) of this Act": (c) By omittinp from subsection (3) the words "Every

person', and substituting the words "Every borrower" ,

(2) This section applies with respect to the 1997-98 income year and subsequent years.

20. Other offences-{I) Section 79 (1) of the principal Act is

amended-(a) By omitting from paragraph amended-(a) the word "Wilfully", and substituting the words "Being a borrower, wilfully":

(8)

1996, No. 63 Student Loan Scheme Amendment 1569 (c) By omitting from paragraph (e) the words "anr, person",

and substituting the words "any borrower'. (2) Section 79 (3) of the principal Act is

amended-(a) By inserting at the beginning of paragraph amended-(a) the words "Being a borrower,":

(b) By inserting at the beginning of paragraph (b) the words "Being a borrower,":

(c) By omitting from Fgraph (b) the words "own or any other person's :

(d) By inserting at the beginning of paragraph (c) the words "Being a borrower," before the word "obstructs":

(e) By repealing paragraphs (d) and (e).

21. Officers and employees of corporate bodies-(I) Section 80 of the prinapal Act is repealed.

22. Penal charge for default in reeaying repayment deduction-{l) Section 86 of the principal Act IS repealed.

28. Application of repealed (»rovisions of Tax Administration Act 1994--{ 1) The pnncipal Act is amended by adding the following section:

"102. Where a provision of this Act (a 'relevant provision')-"(a) Refers to a provision of the Tax Administration Act 1994

that is repealed by the Tax Administration Amendment Act (No. 2) 1996; and

"(b) Incorporates the repealed provision for any purpose to gtve effect to the relevant

provision,-the repealea provision shall be deemed to continue in effect for the purpose of giving effect to the relevant provision."

(2) This section comes into force on the 1st day of October 1996.