New warrant powers to prosecute overseas borrowers at the border. Good reason for expats to be proactive.

Pam Newlove, Partner, Privately Held Business and Chair at Grant Thornton New Zealand, looks at the ramifications of the Bill passed that empowers the IRD to obtain a warrant to prosecute people at the border with student loans in arrears.

The Student Loan Scheme Amendment Bill (No 3), aimed at borrowers who persistently refuse to make repayments, passed last night. From April 1, Inland Revenue will be able to seek an arrest warrant to deal with serious cases.

While some people may see this as an aggressive tactic, and potentially be an inhibitor for overseas New Zealanders returning home, something needed to be done as this situation was getting out of control. But it’s not all doom and gloom - provided people are proactive and plan ahead.

In our recent experience, the IRD have been motivated to settle matters quickly with people who are overseas with unpaid student loans.

Last week I was approached by a New Zealand expat in China who had received a letter from IRD about his student loan after a recent trip through New Zealand. He was applying for a senior role at a high profile New Zealand organisation. He was worried about how his student loan arrears might impact his job application when he returned to New Zealand again.

By working with the IRD we were, in a period of two days from first contact, able to obtained written confirmation of settlement from IRD. We managed to negotiate a significant reduction in the total debt due, without the need to fully repay the debt. The account just needed to be brought up to date.

So the message is clear, be proactive and address the situation, or indeed the long arm of the law will be ready to tap you on the shoulder.

Further enquiries, please contact:

Pam Newlove
Grant Thornton New Zealand Partner, Privately Held Business and Board Chair
T +64 (0)9 308 2579
M +64 (0)27 692 0271
E pam.newlove@nz.gt.com