Alternative contact person

(Clauses 7, 29, 33 and 35)

Summary of proposed amendments

The proposed amendments allow alternate contact details provided to the loan manager (StudyLink) as a condition of accessing a student loan to be received and used by Inland Revenue once the loan is transferred.

Application date

The amendments apply from 1 January 2013.

Key features

Clause 7 allows Inland Revenue to receive details of a borrower’s contact person from the loan manager. The loan manager is appointed by the “lender” (the Government) under the Student Loan Scheme Act to establish and administer loan balances that have not been transferred to Inland Revenue for collection.

When a borrower is in default, Inland Revenue will try and contact the borrower. If this is unsuccessful, Inland Revenue will approach the contact person.

Clause 29 provides for Inland Revenue to request the assistance of the contact person when the borrower is in default and cannot be located. The contact person must be willing to act in that capacity. The proposed amendment specifies that Inland Revenue may request the contact person provide the borrower’s current address details, or ask the borrower to notify Inland Revenue of their details.

The contact person will only be contacted for the purpose of providing any up-to-date contact details for the borrower. No details of the loan such as the loan balance or the amount of the default will be given to the contact person. Inland Revenue will not use the contact details to follow up on the contact person’s tax obligations.

Background

While borrowers are required to keep their contact details current, often these become out of date after they complete study. This can be a particular problem if the borrower goes overseas.

Having a contact person provides another way for Inland Revenue to locate borrowers who have lost touch to help them manage their loan.

The contact details requirement is distinct from the “nominated person” process. Borrowers may nominate a person to act on their behalf while they are overseas. The nominated person can act on behalf of the borrower and can make enquiries, receive statements and correspondence.