Borrowers with a serious illness who are unable to meet their overseas-based repayment obligations may be able to be treated as physically in New Zealand.
The amendment will require the borrower to provide evidence of their medical and financial position as the Commissioner of Inland Revenue requires.
If someone with a student loan debt, living overseas, has a serious illness and, is approved by the IRD, this will mean that instead of having to make compulsory payments each six months that person's payment obligation will be assessed on the basis of their income. If their income is low then no repayment may be required. Assuming payment obligations (if any) are kept to, the person should not be charged ordinary or penalty interest which should help keep their debt at a more manageable level, however, in some cases the borrower may still be better off considering bankruptcy so that the debt burden is eliminated. This amendment is expected to come in to force on 1 April 2020.