Generally, New Zealanders on an SCV are not able to get an Australia student loan, known as a HELP loan, unless they have been living in Australia for 10 years. Read more below.
Regarding your NZ student loan, if you’re going overseas for 6 months or more your New Zealand student loan won’t be interest-free. Below is all the information you need, including repayment amounts and a student loan repayment calculator.
On this page you will find the below helpful information:
New Zealand citizens are eligible to access a CSP but do not meet the eligibility criteria to access a HELP loan.
To be eligible for a HELP loan you must:
Your higher education provider will ask you to supply documentation to assess whether you meet all of the long-term residency requirements. The long-term residency requirements for New Zealand SCV holders are that you:
If you do not meet ALL of the above requirements, you cannot get a HELP loan.
As a New Zealand citizen and/or NZ SCV holder, you must be resident in Australia for the duration of your unit(s) to meet the CSP and HELP residency requirements. However, any period of residence outside Australia will be disregarded if:
You can more on the Australian Government website Study Assist.
A Commonwealth supported place (CSP) is a place at a university or higher education provider where the Australian government pays part of your fees. This part is a subsidy, not a loan, and you don’t have to pay it back.
This subsidy does not cover the entire cost of your study. The remaining portion is called the ‘student contribution amount’, the payment for which YOU are liable.
The student contribution amount must be paid by the census date. You will need to organise to pay this amount upfront.
Most CSPs are for undergraduate study. Only some providers offer CSPs at the postgraduate level. If you are a postgraduate student you should check with your provider to see if they offer CSPs in your course.
Being eligible for a CSP does not mean that you will be offered a CSP as each provider and each course can have its own extra entry requirements.
You can view a fact sheet on CSPs here.
Your provider will assess your eligibility for a CSP against the criteria below. If you have any questions, please contact your higher education provider. To get a CSP, you must:
As well as the above residency and citizenship requirements, to get a CSP you must:
If you travel outside New Zealand for more than six months the IRD don’t base your repayments on your income, they base the payments on your student loan balance and charge interest to the balance owing.
Each year you’re away the IRD will work out your repayment amounts again. Your new repayment amounts will be available after 31 March.
Your minimum annual repayment obligation is as at:
You can make voluntary repayments anytime, but you must meet the instalment dates of 30 September and 31 March.
Instalment date payments are 50% of your repayment obligation. This will only be different if you’ve made other arrangements with the IRD.
Your repayment obligation stays the same if your loan balance decreases. But, if your balance increases your repayment obligation will increase.
You can check what you owe and when your repayments are due in your myIR Secure Online Services account.
The below table shows how much you need to pay depending on your loan balance.
|When your loan balance is:||30 September||31 March|
|under $1,000||you need to pay your whole loan balance|
|$1,000 and up to $15,000|
|over $15,000 and up to $30,000|
|over $30,000 and up to $45,000|
|over $45,000 and up to $60,000|
Depending on the size of your loan (over $90,000) your repayments might not be enough to cover your interest.
When you leave New Zealand during the tax year you might have:
Use the IRD student loan repayment calculator to work out how much interest will be added to your loan and how long it’ll take to pay it off.
Below is an example using a student loan amount of $10,000:
If you’ve missed payments the IRD may charge you late payment interest. If you’re having difficulty repaying your loan contact the IRD. They might be able to offer you some payment options. Talk to them if:
Your loan will remain interest-free if you’re going overseas for 183 consecutive days or less (about 6 months) and you have been living in New Zealand for at least 183 consecutive days prior to leaving. You’ll still see interest being applied but this is automatically written off.
Please note: if you travel overseas for less than 6 months on a regular basis, your loan will remain interest-free as long you’re back in New Zealand for 32 days or more before you leave again.
If you’ll earn a New Zealand salary or wages while you’re away, you’ll still be required to have student loan repayments deducted from this income.
If you earn any other income from New Zealand and/or overseas income while you’re away, you’ll need to let us know after the end of the tax year (31 March). This is because you’re still a New Zealand- based borrower and your repayments are based on your worldwide income.
If you have any other repayment obligations due while you’re away or would like to make voluntary repayments, there are a number of ways you can make a payment.
When you go overseas:
You need to let us know if you’re going to be overseas for 184 days (about 6 months) or more. The easiest way to do this, if you also want to apply for a repayment holiday, is to complete the form in your myIR Secure Online Services account.
Otherwise, send us secure mail through your myIR account or call us on 0800377778 (+64 3 951 2020 from overseas).
You need to include:
You’ll become an overseas-based borrower if you’ll be overseas for 184 days or more. This means you’ll have different repayment obligations and your loan will no longer be interest-free. Interest applies to your student loan from the day after you leave New Zealand.
There are certain situations where you may still qualify for an interest-free loan while you’re overseas.
In most cases, you won’t qualify for an interest-free loan if you go overseas for 184 days (about 6 months) or more. However, you may still qualify for your existing loan to remain interest-free if you meet the conditions for one of the following situations:
There are two additional circumstances where you may still qualify for your existing loan to remain interest-free:
You can apply for a repayment holiday if you’re going overseas for 6 months (184 days or more), which means you won’t have an overseas-based repayment obligation to pay for up to the first year (365 days) of being overseas. A repayment holiday is optional but you’ll need to apply if you want one.
The following conditions apply to repayment holiday applications:
If you don’t meet these conditions your application may be declined.
You can apply for the repayment holiday through your myIR account by completing the form.
Otherwise, send us secure mail through your myIR account or call us on 0800377 778 (+64 3 951 2020 from overseas).
Please note: Repayment holidays don’t stop interest on your loan, so it’s still a good idea to make voluntary repayments to keep on top of your loan.
When you return to New Zealand after being overseas for 184 days (about 6 months) or more, you must let us know so we can update your student loan details and contact information.
I get asked, what should I do now that my student loan is huge because I didn’t make any payments since I moved to Australia?
The Spinoff has a great post on what happens when you have a student loan and leave NZ. Moving overseas post-graduation? Be prepared for your friendly interest-free student loan to become an out-of-control debt monster, writes Chelle Fitzgerald.
If you have a student loan in New Zealand but then leave the country, the loan will continue to accrue interest even if you don’t make any payments. You will still be responsible for repaying the loan, and any overdue payments will continue to accrue interest and penalties.
What will happen to your NZ student loan while you’re living in Australia? You either pay it off and you get peace of mind, or it gets considerably bigger and is a continual stress. The larger it gets, the more likely it becomes that the IRD might take action.
The most serious action Inland Revenue could take against an overseas-based borrower is to apply for garnishee orders on overseas income, initiate bankruptcy procedures in an overseas court or commence an arrest warrant process if the borrower crosses the New Zealand border.
However, these are very much options of last resort after all other attempts to negotiate with the borrower have failed. Basically, they can take away some of your income before you even see the money, force bankruptcy upon you, or put a warrant out for your arrest.
Here is an article on the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill that was passed in May 2016. The bill was to make it easier for NZ to chase defaulters in Australia.
You may also have a problem if you ever want to return to NZ for a holiday. Here is a post from the Citizens Advice Bureau about what factors could prevent you from leaving New Zealand.
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