Purpose: To detect student loan borrowers who leave for, or return from, overseas so that IR can administer the student loan scheme and its interest-free conditions.
Year commenced: 2007
Features: Data transferred in near real-time by online transfer.
IR disclosure to Customs: IR provides Customs with the full name, date of birth, and IRD number for student loan borrowers who have a loan of more than $20.
Customs disclosure to IR: For possible matches to borrowers, Customs provides the full name, date of birth, IRD number and date, time and direction of travel.
2011/12 Activity: There were 485,464 borrower records (441,206 last year) updated as a result of matching student borrower records with travel movement information held by Customs.
Commentary: An audit on the operation of this programme found that there are effective controls in place and no issues were identified.
|Information matching provision||Student Loan Scheme Act 1992, s.62A |
Customs and Excise Act 1996, s.280H
|Programme type||Confirming eligibility|
Identifying unclaimed entitlement
|Unique identifiers||Tax file number|
IR provides Customs with the full name, date of birth, and IRD number for student loan borrowers who have a loan of more than $20 for storage in a Person of Interest (POI) list. The POI list held at Customs is updated by IR in near real-time as borrowers travel and meet, or cease to meet, the selection criteria.
The matching process for the POI list involves a character-by-character comparison of the family name, given names (and any aliases), and date of birth. Customs supplies POI information to IR where there is an exact match between information on the POI list and passenger movement information generated when an individual passes through Customs. For matched individuals, Customs supplies IR with their family name, given name(s), date of birth, IRD number, and date, time and direction of travel (arrival or departure).
On receipt of travel movement information from Customs, IR starts counting the number of days that the borrower remains in or out of New Zealand. IR issues a notice of adverse action (s.103 notice) at approximately 140 days, advising the borrower that if they remain in or out of New Zealand (as the case may be) their eligibility for an interest-free loan may change.
From the introduction of the personal tax summary (PTS) process on 1 April 1999, resident student loan borrowers were required to file a tax return or respond to a PTS in order to receive an interest write-off. Although obliged to do so, many borrowers travelled overseas without advising IR. Under the previous non-resident repayment obligations, there was a perceived advantage for borrowers not to advise IR of their departure from New Zealand. As a result, these borrowers were incorrectly showing in IR's system as resident in New Zealand. IR had given interest write-offs to all borrowers showing as resident in their database regardless of whether they had filed a tax return or responded to a PTS.
To remedy the cases where IR gave the write-off incorrectly, a historic match run (permitted under their information matching provision) was initiated in November 2007. The historic match run identified students who were not eligible (because they did not meet residency conditions) for the interest write-offs that were applied from 1 April 1999 to 31 March 2006 (six tax years).
Customs/IR Student Loan Interest Programme: 2007 Historical Match Run Results
|Student records compared by Customs||56,701|
|Matched records returned to IR||38,184|
|Number of interest write-off reversals||29,846|
|Total value of interest write-off reversals||$96m|
|Average interest write-off reversal||$3,214|