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Annual Report
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.
IR disclosure to Customs: IR provides Customs with the full name, date of birth, passport number (if held), 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, passport number, and date, time and direction of travel.
Compliance: Compliant.
| Information matching provision | Student Loan Scheme Act 2011, s.208 Customs and Excise Act 2018, s.306 |
| Year authorised | 2007 |
| Year commenced | 2007 |
| Programme type | Confirming eligibility Identifying unclaimed entitlement |
| Unique identifiers | Tax file number, passport number |
| Online transfers | Yes |
System description
This programme involves a two-way exchange of information between IR and Customs using near real-time business to business (B2B) encrypted communications.
IR provides Customs with the full name, date of birth, passport number (if held), 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 match by passport number, or failing that 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, passport number used, 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.181 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.
Border movement information is posted in the borrower’s myIR account, providing transparency of the basis for calculating their status (overseas-based, or interest-free New Zealand based). This information can be disputed and corrected.
| 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | |
| Borrower records updated | 597,864 | 459,069 | 26,176 | 50,811 | 431,111 |
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 |
| Challenges | 114 |
| Successful challenges | 41 |
This programme was previously authorised by section 280H of the Customs and Excise Act 1996.
The utility of this provision has been assessed in a report Review of statutory authorities for information matching: Four Inland Revenue matches. (November 2018).
