Recovery of overpayments
The Receiver General for Canada has authority to recover overpayment from employee due to administrative error or if an unearned payment is made.
The following are examples that may be overpaid or paid in advance and need to be recovered:
- Outstanding overpayment on termination
- Vacation advance
Reference: Common Human Resources Business Process 4.01.08
Repay these funds.
Overpayment identified by the Pay Centre
The employee will receive a notification from the Pay Centre that an overpayment has been identified and the amount to recover is greater than 10% of the gross pay.
Upon receipt of notification:
- Review repayment options
- Make a repayment arrangement
Lump sum recovery by cheque:
- Provide a cheque for the full amount made out to the Receiver General for Canada and mail it to the Pay Centre: Mail facility along with a pay action request form PSPC 446-5E duly completed
Recovery in four installments by post-date cheques:
- Provide post-dated cheques made out to the Receiver General for Canada and mail it to the Pay Centre: Mail facility along with a pay action request form PSPC 446-5E duly completed
This option is available if you are receiving a monthly public service pension:
- Contact and make arrangements with the Pay Centre
If the amount to recover is greater than 10% of the gross pay and the full and immediate amount imposes a financial hardship:
- Provide the required information to manager for authorization
Important: If no claim of financial hardship is made the overpayment will be recovered from the first available funds.
If the amount to recover is less than 10% of the gross pay, the funds will be automatically recovered from first available funds.
Overpayment identified in the department
(For example: not reported by finance to the Pay Centre prior to the termination of that employee).
Provide amount to the Pay Centre for the creation of the overpayment.
The delegated authority:
- Authorize the employee’s hardship request
- Review an employee’s hardship request and determine if additional time is required to process the request
Important: If delegated authority authorization is received, the hardship request is sent to the departmental authority for approval.
Upon receipt of authorization from delegated authority and departmental authority approval:
- Send the hardship request to finance
- Work with the employee and finance to establish a repayment schedule
Note: Either the manager or finance will send the repayment schedule via a trusted source who is responsible for authenticating the delegated authority signature to the Pay Centre: Mail facility by encrypted email, fax or mail, including a pay action request form PSPC 446-5E duly completed.
Important: If the hardship request is rejected. Inform the employee and the Pay Centre.
If the hardship request is approved. Work with the delegated authority, employee and departmental finance to establish a repayment schedule.
If the hardship request is approved:
- Work with the employee, delegated authority and human resources to establish a repayment schedule and provide this information to the trusted source who is responsible for authenticating the authorization on the hardship request and then sending this information to the Pay Centre: Mail facility along with a pay action request form PSPC 446-5E duly completed
- Pursue collection action on overdue accounts (e.g. where sufficient funds were not available on a separation) in accordance with the policy and guidelines on the collection of overdue accounts
If an account is terminated and recovery is complete. Notify the Pay Centre so the amount can be removed from the pay system.
Upon receipt of authorization from delegated authority and departmental authority approval of hardship request:
- Ensure that signatures on paper requests transmitted from a departments to Pay Centre are authenticated, for example:
- The section 34 signature is authenticated for all requests affecting financial results and/or manager’s budget before it is sent to the Public Service Pay Centre
- The human resources delegated signature is authenticated for all requests being submitted by departments (excluding direct from employees)
Note: Paper requests submitted directly by employees to Pay Centre, without any departmental signatory requirements are excluded from the trusted source scope.
- Check the trusted source list
- Run the R19 Report in Phoenix to identify overpayments
- Notify the employee that an overpayment has been identified (via email or mail)
- Include instructions for the employee to work with their departmental delegated authority if they need to file a claim for financial hardship
- Provide a copy to departmental finance
Note: Phoenix will automatically recover the overpayment from the first available funds if the overpayment if less than 10% but will put on hold if greater than 10% for 6 months after notification unless a claim of financial hardship is received within this time period.
Upon receipt of approved and authorized claim of financial hardship:
- Enter the repayment schedule
- In cases where there is no government payment to recover from
- Contact the person to solicit a voluntary payment of any amount still owing. If the person does not respond after 30 days an overpayment, final request letter will be sent with a copy to the person’s former Department of Finance. This situation also applies when finance does not notify the Pay Centre of overpayments identified in the department prior to the termination of an employee
- Request payment by certified cheque or postal money order where applicable
- Cash the cheque and notify finance that the payment has been received where applicable
Important: If the overpayment cannot be recovered by the organization it will be reported on the termination or retirement information form PWGSC 2386, the Government of Canada Pension Centre will recover the debt from pension payments where possible. This form is sent by the Pay Centre as part of the termination procedures to the Pension Centre.
Upon receipt of the termination or retirement information PWGSC 2386:
- If the overpayment cannot be recovered by the organization. Recover the debt from pension payments where possible
Note: This form is sent by the Pay Centre as part of the termination procedures to the Pension Centre.
- Date modified: