13 November 2024

Inland Revenue is increasing its efforts to gather child support and student loan debt owed by Kiwis living overseas.

IR has doubled the staff working in these areas and is looking at new ways to recover debt owed by expats.

It is part of IR’s work, using the $29 million allocated for compliance in this year’s Budget, to increase debt collection in countries such as Australia and the United Kingdom.

Student loans

Inland Revenue has increased the number of the team chasing overseas based student loan debt, from 20 FTE at the end of June to more than 45 now. It means we can now contact most people with a debt who return to New Zealand at any time.

We’ve registered civil proceedings in the Australian and United Kingdom courts against people who haven’t repaid their loans.

We’re monitoring the border movements of the largest debtors and also contacting people with a student loan debt who also own property or have investments in New Zealand.

A story from the border

"Customs alerted us that a borrower in serious default of their loan had returned to New Zealand from a country that we don't have any reach into. They applied for financial relief, but we established they had significant funds in a New Zealand bank, and the request was declined.

In exchange for a small remission of late payment interest, we negotiated the full repayment of the $70k loan. This customer has since told us they will be putting their friends in touch with us to clear their loans also."

The stats

• The number of overseas-based borrowers (OBB) has increased by 5,362

• The number of defaulters has increased by 11,921 5.2k of OBB customers paid off their loan in the past 12 months

• 3,158 defaulters are in an active arrangement with default of $22m

Child Support

We’ve also doubled the size of our team working on Child Support Debt. 

They’re looking at customers who we suspect are hiding income, perhaps through being self-employed. Where we can't establish someone’s income, we will look at the assets they have and look to use those to pay their debt.

We’re also stopping some child support debtors at the border and looking to get a lump sum payment upfront or have them enter a payment arrangement.

A liable parent’s experience

"Recently when working on a case to collect a debt from a liable parent, we found that they were selling their property. Once it was sold, we collected the full amount of their outstanding debt totaling over $10,000 from the proceeds of the sale. The funds were paid out to all the receiving carers it was owed to."

The statistics

• From September 2023 to September 2024 Child Support international debt decreased from $394 to $336 million

• From September 2023 to September 2024 Child Support international customers increased from 2,306 to 2,394 customers

• We were alerted to nearly 600 child support customers with serious default as soon as they entered New Zealand. Eleven warrants were issued at the border for overdue child support payments during the year.

• Under the Hague Convention reciprocal agreements resulted in $88,388.20 child support received.

• We received $45 million from Services Australia that is passed on to receiving carers in New Zealand.

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