What to do if you receive an overpayment recovery letter


Some members may have received letters from the Public Services and Procurement Canada (PSPC) Pay Centre in an attempt to recover funds that they believe to be overpayments. If you have received such a letter here is what you need to know to make sure you are not agreeing to repay amounts you are no longer required to reimburse.

Last year, the Employer launched its plan to recover funds it believed were overpaid to employees through the Phoenix pay system in 2016 and onwards. Some of these overpayment recovery letters refer to amounts that are inaccurate, or unverifiable. Others have been sent to employees who are still owed significant amounts from the Employer due to past Phoenix errors. And still others contain amounts that are over 6 years old and fall outside of the six-year limitation period.

The Crown Liability and Proceedings Act stipulates a six-year limitation period which prohibits the government from taking legal action against someone to recover money after the limitation period has expired. While the government can send a letter asking members to repay the money beyond the six-year period, we believe they cannot force someone to pay it or recover it without prior agreement.

If you have received an overpayment recovery letter from the PSPC Pay Centre, we recommend you take these five important steps.

  • When you receive the overpayment letter, note the date at the top of the letter which indicates the official notice of the alleged overpayment, and then look carefully at the date of the overpayments listed. Highlight any that occurred more than six years before the date stated at the top of the letter. Only the amounts dated six years prior to the date of the letter are eligible to be challenged.
  • Verify the accuracy of the overpayment amount and ask the employer for detailed information to verify the overpayment amount.
  • If you believe there are some amounts that you still owe the employer, make sure to reimburse only the ones that do not exceed that six-year limitation period.
  • Respond to the overpayment letter within the four-week deadline by choosing Option 2 in the letter (disagreeing with the validity and/or amount of the overpayment) and state that the overpayment(s) is outside of the limitation period.
  • You may wish to consider filing a grievance against the employer. The deadline to file a would be 25 working days from the date of the letter informing you of the overpayment. It must be noted that filing a grievance will not stop the employer from recovering the overpayment if it so wishes. However, it sets down a marker for future adjudication. If you wish to proceed with a grievance, let us know, we can help you with the filing process.

If you do not respond to the overpayment recovery letter with the four-week deadline, the employer can begin the recovery process for any amounts outside of the six-year limitation period. This recovery will continue after the expiration of the limitation period if it had begun prior to it.

Even if the employer agrees to write off the debt following your response to the overpayment recovery letter, you may not receive confirmation that the debt has been written off. This is also an unacceptable part of the employer’s overpayment recovery plan, leaving our members in the dark about the status of their overpayments. PAFSO is working to ensure this practice is changed moving forward.

Our work to support members through Phoenix issues is ongoing. Make sure we have you up to date contact details so we can keep you informed. If you have any concerns or require any assistance with the above, please do not hesitate to contact our office. We are here to help.

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