A Kiwi woman who has lived in Australia for 21 years says she spent months attempting to arrange a repayment plan with Inland Revenue before being arrested at the border over unpaid fees.
Te Amo Matangi, 49, studied and paid off her university fees more than two decades ago.
Matangi obtained another small loan for some certificates and a diploma, which she chose not to complete, making her student loan balance at the time $13,000.
Since then, Matangi had moved to Australia.
In New Zealand, student loans start to collect interest when a person has been overseas for more than six months.
This meant the $13,000 student loan ballooned to $58,000 - this led to a court summons for Matangi and a court date in New Zealand at the end of August.
Matangi made arrangements to come to NZ for the court date, but before that she had to cross the ditch for a niece’s birthday.
She arrived last Wednesday.
However, when she attempted to leave the country from Christchurch Airport for the Gold Coast with her family on Monday afternoon, a ticket scan triggered an alert.
A police officer seized her passport and informed her a warrant had been issued for her arrest due to an overdue student loan balance.
She was arrested and taken to Christchurch Central Police Station, a process she described as “freaky and unnecessary” given she had not been charged with a crime.
“The police officers in the jailhouse were really nice; they didn’t understand why I was there,” Matangi said.
The next morning, Matangi was ordered to appear in Christchurch District Court through audio visual link.
Matangi said the judge even asked why she was there, given it wasn’t a criminal matter.
Matangi remains in Christchurch and cannot return to Australia until she and IRD reach an agreement.
However, Inland Revenue said it will accept nothing short of payment in full and suggested she borrow from lenders.
But Matangi has struggled to secure a bank loan after over 20 years of not working in New Zealand, and is now relying on a lawyer to navigate the process.
She said she took full accountability and was willing to resolve the issue, but felt like she was “made to jump through hoops”.
“I don’t think that I needed to be put in jail, and that’s what the police officers were reiterating as well,” Matangi said.
“I just feel like [IRD] is really trying to make a statement.
“But they could have made a statement by purely detaining my passport, which would have forced me to do exactly what I’m doing now.”
Matangi said she had tried to liaise with Inland Revenue for months before her trip, and had even attempted to make $250 fortnightly payments towards her loan.
“I said that I had started making payments, but I was told to stop paying as it wasn’t an amount that IRD had agreed upon,” Matangi said.
“I said that it was all I could afford at the moment, but that when I get a tax return, I’ll put more money in.”
But Matangi said she was told she would have to pay upwards of $700 to even make a dent in her loan.
“The only thing IRD wanted to entertain was that, or the full amount,” she said.
Matangi’s lawyer, Dave Ananth, said he didn’t deny that his client should have engaged more with Inland Revenue, but he was taken aback that she had been arrested.
“I am a bit surprised about the actual arrest, and not just threatening to,” Ananth said.
“I have dealt with larger loans than this and longer periods. As far as I know, there haven’t been any arrests in those cases.
“It’s not common, it’s very, very, rare.”
Matangi urged other Kiwis living overseas to “take the time” with Inland Revenue, to not make the same mistake.
“Those sorts of things, they require sitting down and going through it quite intimately so you can fully understand it,” she said.
“It’s not ideal. I don’t like being on the phone for too long, and to sit on the phone for three hours, I was like, ‘wow’.
“But to work out your student loan with your person with IRD is probably the biggest advice I can give.”
In a statement, Inland Revenue said detaining people wasn’t the preferred option.
“An arrest at the border on student loan or child support matters is action IR takes as a matter of last resort, when someone has refused to engage with us about their debt or when all other avenues to resolve the debt have been exhausted.”