Privacy Commissioner - Te Mana Matapono Matatapu

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Customs/IR Student Loan Interest Programme

• Annual report
• Technical information
• System description
• Historical activity

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.

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 all student loan borrowers.

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.

2008/09 activity:

Approximately 54,400 student borrower records were updated as a result of matching student borrower records with travel movement information held by Customs.

An audit on the operation of this programme found there were effective controls in place and no issues were identified.

Compliance: Compliant.

Technical information

Information matching provision	Student Loan Scheme Act 1992, s.62A    Customs and Excise Act 1996, s.280H
Year authorised	2007
Programme type	Confirming eligibility Identifying unclaimed entitlement
Unique identifiers	Tax file number
On-line transfers	Yes

System description

The match involves a two-way exchange between Customs and IR. Details of student loan borrowers are passed by IR to Customs via a secure electronic near real-time business to business (B2B) link for storage in a Person of Interest (POI) register. The POI register held at Customs is updated by IR in near real-time as borrowers travel and meet, or cease to meet, the selection criteria.

The Customs information comparison process involves a character-by-character comparison of the family name, given names (and any aliases), and date of birth. Customs only supply information to IR where it has determined that there is an exact match result. Passenger movement information, for people that match the details on the POI register includes the family name, given name(s), date of birth, IRD number, and date, time and direction of travel (arrival or departure).

On receipt of a border crossing movement record from Customs, IR stores that information and starts counting the number of days that the borrower remains in or out of New Zealand. IR will issue a s.103 notice at approximately 140 days, advising the borrower that it has received information about travel movement and if they remain in or out of New Zealand (as the case may be) their eligibility for an interest-free loan may change.

Historical activity

Inland Revenue complete an annual compliance audit to satisfy the reporting requirements of this Office.

For 2007/08 IR's Corporate Risk and Assurance Division reported that there were effective controls over the administration of the information matching programme and no issues were identified.

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. As a result these borrowers were incorrectly showing in IR's system as residents. IR has been giving 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 position for 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