Excess repayment bonus

Clauses 115 to 121

Submission

(NZ Union of Students’ Associations)

The submitter has queried the impact on the excess repayment bonus in moving to a pay-period basis of assessment for salary and wage earners.

Comment

Borrowers who want their employer to deduct additional repayment deductions from their salary or wages can continue to do so. So that these amounts can be identified as qualifying for the bonus, the employer will apply a new tax code – a student loan additional deduction rate code, to these repayments.

Borrowers who have a significant over-deduction of their repayment obligations will be able to receive a refund of this amount or apply it to the loan balance and thereby qualify for the excess repayment bonus. Minor over-deductions will not qualify for the bonus.

Recommendation

That the submission be declined.