Question Period Note: Phoenix overpayments

This note focuses on Phoenix salary overpayments. A salary overpayment is an amount of money paid to an employee to which they are not entitled. Overpayments exist for current employees, pensioners, and former employees who are not in receipt of a pension.

Notes:

• Questions related to the Directive on Terms and Conditions of Employment should be directed to the President of the Treasury Board
• Questions regarding the tax implications of Phoenix payroll issues should be directed to the Canada Revenue Agency

• Our priority is to support current and former employees and resolve outstanding pay issues as quickly as possible, including recovering overpayments
  • Recovering salary overpayments has always been part of the Government of Canada activities, even before the implementation of the Phoenix Pay System
  • In its stewardship role, the Government has an obligation to recover outstanding overpayments
  • Thousands of current and former federal employees have already reimbursed overpayments, or have made arrangements to do so
  • We recognize that the recovery of overpayments can be stressful for those affected, and multiple measures have been put in place to support individuals experiencing financial hardship, including flexible repayment options

Recovery of overpayments supports the Government of Canada’s mandate to eliminate the backlog of outstanding pay issues for current and former public servants as a result of the Phoenix Pay System, in order to rebuild their confidence in the integrity of their pay and pensions.

Salary overpayments impact current and former public service employees across departments, agencies and across the country.

The Receiver General and Pension Branch, in collaboration with the Office of the Comptroller General, and the Pay Administration Branch, has begun work to establish recovery strategies:

• For current employees: priority has been given to files with overpayments from 2016
• For pensioners: the Receiver General has put in place a strategy to recover overpayments from pension funds through the Government of Canada Pension Centre
• For former employees who left without a pension: the Receiver General is providing support and guidance to departments and agencies

On October 12, 2021, Treasury Board of Canada Secretariat released a bulletin titled Additional information on the recovery of overpayments, emergency Salary Advances, and Priority Payments. In order to protect the Crown’s right to recover, the bulletin states that employees may, in writing, acknowledge their overpayments which will allow them access to the flexibilities put in place by the Office of the Chief Human Resources Officer – Employment Conditions and Labour Relations. These flexibilities allow employees to delay reimbursing the overpayment until their pay file is reconciled and they have received their correct pay for three consecutive pay periods.

These flexibilities do not apply to routine pay transactions – for example, overpayments as a result of Leave Without Pay (LWOP) of 5 consecutive days or less. In those instances, overpayments are automatically recovered from first available funds.

The Receiver General and Pension Branch is resuming the collection of overpayments from pensioners previously employed by departments and agencies served by the Public Service Pay Centre.

For former non-pensioned employees who were served by the Public Service Pay Centre, two attempts are made by the Public Service Pay Centre to recover funds upon termination of employment. If unsuccessful in recovering through these attempts, the file is transferred to the employer department or agency for further action.

Departments and agencies not served by the Public Service Pay Centre are responsible for recovery of funds from their current and former employees, though the Government of Canada Pension Centre does assist with recovery from pension recipients when requested.

We recognize that the recovery of overpayments can be a source of stress. Current employees and pensioners facing financial hardship can have their recovery rate, traditionally set at a rate of 10% of their regular payment, lowered if requested.

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