Phoenix overpayment letters: Keep an eye out for overpayments that are over six years old

The rushed Phoenix overpayment recovery plan launched earlier this year by the employer is already producing major errors and misleading information. Some overpayment recovery letters sent by the Public Services and Procurement Canada (PSPC) Pay Centre contain amounts that the employer has no legal recourse to recover as they are outside of the six-year limitation period.

What is the limitation period for recovering Phoenix overpayments? 

The six-year limitation period is found in the Crown Liability and Proceedings Act. The limitation period 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 even after a limitation period has passed, they cannot force someone to pay it or recover it without prior agreement. 

Is it upsetting and completely unacceptable that members are receiving overpayment letters containing amounts that are past the six-year recovery threshold. We can only conclude the employer is knowingly including and demanding repayment for amounts considered outside the limitation period in the hope that members may not notice and agree to repay these amounts. 

In addition, many members are receiving overpayments with inaccurate and unverifiable overpayment amounts. PSAC is concerned that members will have inaccurate overpayments recovered, thereby paying back amounts that are not owed. Moreover, many of our members were not aware that they had overpayments until now and are shocked to be receiving these letters so many years later. 

Lastly, in numerous cases the employee is still owed significant sums of money due to past Phoenix errors, and therefore their account should be reconciled before receiving an overpayment letter. When this is taken into account, in many cases it is the employee that is owed money – not the employer.

What is PSAC doing about this? 

PSAC is working to stop the employer from including the amounts that are past the limitation period in future letters. 

PSAC is also intervening in specific members’ cases where the employer is attempting to, or has already, attempted to recover an amount that is past the limitation period. 

In the meantime, PSAC is urging all members to look carefully at the amounts and dates listed in the overpayment letter they receive from PSPC. 

PSAC’s recommendations on how to proceed:

  • 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.

  • 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 by choosing Option 2 in the letter (disagreeing with the validity and/or amount of the overpayment) and stating that the overpayment(s) is outside of the limitation period.   

  • Consider filing a grievance. The deadline to file a grievance is found in your collective agreement, and your union Local can help you with filing it.  

Please note that even if the employer agrees to write off the debt after a member responds to the letter, the member may not hear back from the employer confirming that their 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. PSAC is working to ensure this practice is changed moving forward.

PSAC is providing this update to ensure that members are not inadvertently agreeing to repay amounts they are no longer required to reimburse the employer. The Union has provided additional guidance for more general concerns related to overpayment letters. Please review them carefully.

The Union’s work to support members through Phoenix issues is ongoing. Make sure to keep your contact information up to date to get the latest information. If you have any concerns or require any assistance with the above, please contact PSAC’s  Phoenix team for help  by selecting "Phoenix Overpayment" from the "What is your inquiry about" dropdown menu.

Topics: 

June 30, 2022