The employer launched its Phoenix overpayment recovery plan last year. Since then, many current and former PSAC members have received letters of overpayment. While we recognize that some members owe overpayment amounts, the rushed process produced major errors. 

If you have received an overpayment letter, please refer to the FAQ section below before taking any action. 

1. I’ve received an overpayment letter. What do I do?

Know that you’re not alone. In 2022, the government sent out nearly 10,000 overpayment letters for 2017 overpayments, and in 2023, we expect to see more than 37,000 letters sent for 2018 overpayments. Currently, there are more than 22,000 letters about 2018 overpayments that still need to be verified and sent out. 

Here are the steps we suggest you follow:   

 

• First, read the letter over carefully.  
• Check if there are any problems with the overpayment letter:  
  • Annex A should provide the details required to understand your overpayment letter  
  • Check if any of the overpayments may be past the 6-year limitation period; the employer cannot compel you to repay these amounts.   
  • Confirm if the overpayment amount is correct.   
  • Confirm if you need to seek more information to understand the overpayment.  
  • Check if you’ve already repaid the overpayment (sometimes a duplicate overpayment letter is issued in error). 
• In June 2023 the Pay Centre started using different templates for the letters, which were clearer in some ways, but in others more confusing. Depending on the department some of the new templates are modified, resulting in more complicated letters than before. Some departments are continuing to use the pre-June 2023 format. 
• Fill out Annex B – this is where you say whether you agree or disagree with the overpayment. Make sure to respond to the letter within the deadline given for response, to avoid automatic recovery. If you disagree, make sure to explain why. 
• Send in your Annex B along with a Pay Action Request as instructed on either Page 1 or 2 of the letter 
• Consider whether you want to file a grievance – see the question below: Should I file a grievance to challenge my overpayment?  
• Once you’ve sent in your Annex B, if you disputed the overpayment, a Compensation Advisor will be in touch with you to discuss further. Wait for the Compensation Advisor to contact you. 
   

2. I’m getting deductions taken off my pay, but I haven’t received an overpayment letter. What should I do?

You are entitled to an overpayment letter that outlines in detail the overpayment, and provides you with an option to dispute or accept the overpayment and repayment options. 

If you haven’t received a detailed overpayment letter, contact the Client Contact Centre and advise the agent that an overpayment recovery has started and you have not been provided with an overpayment letter, the chance to review, or options for repayment.

3. What are my options to respond to an overpayment letter?

On the last page of the overpayment letter, you will find Annex B with the options for replying to the letter. 

If you received a pre-June 2023 letter template, you can either check off Option 1 – I acknowledge the overpayment from X calendar year as detailed in Annex A of this letter dated Y or Option 2 – I acknowledge the letter dated Y but disagree with the validity and/or amount of the overpayment as a result of (provide or attach details).  

If you pick Option 2, you must fill in information as to why you disagree, or else the employer may commence recovery.  

If you received one of the newer post-June 2023 letters, there are several options which are covered in more detail in How do I fill out the Options page (Annex B)? 

4. Are all overpayment letters wrong?

Many overpayment letters PSAC has seen fall outside the six-year limitation period for recovery, have had errors, have included overpayments that have already been repaid, or have had insufficient information.

However, not all are invalid.   

If you know that your overpayment is valid, and none of the below situations in the next question apply to you, you will have to repay the overpayment.  

5. Should I dispute the overpayment?

There are certain situations in which you can dispute the overpayment. These include if:

• You haven’t received enough information to understand the overpayment.  
• You believe the overpayment is a mistake / has been incorrectly calculated.  
• You believe the overpayment has already been repaid.  
• It is past the 6-year limitation period.  
• The employer has promised you don’t have an overpayment or that it’s been repaid and you relied on that promise to your detriment.  
• You were unaware until now that you had an overpayment, and you relied on the correctness of your pay to your detriment. 
• You would suffer severe hardship if you had to repay it.  

6. How do I fill out the Options page (Annex B) in my overpayment letter?

If your letter is the pre-June 2023 template overpayment letter, the Annex B should have two options:   

• Option 1 (I acknowledge the overpayment)
• Option 2 (I acknowledge the letter but disagree with the validity and/or amount of the overpayment) 

If you dispute your overpayment, check off Option 2 and write in the blank lines the reasons for your dispute (you can also attach a separate page if you need more space). 

If your letter is based on the post-June 2023 format, the Annex B may have the following options:  

 

• Option A – Payment to organization directly for the full overpayment amount. Payment methods available are…; or  
• Option B – I disagree with the validity or amount of this overpayment and have provided detailed reasons / attached supporting documentation*. 

 

Other formats PSAC’s Phoenix team has seen provide two or three of the following options:  

 

• Option 1 – I acknowledge and agree with the overpayment as detailed in Annex A of this letter dated DD-MM-YYYY and wish to immediately repay the overpayment (select repayment option A, B or C below);  
• Option 2 – I acknowledge and agree with the overpayment as detailed in Annex A of this letter dated DD-MM-YYYY and wish to defer repayment (select repayment option A, B or C below) until the conditions are met (you are paid all your outstanding monies owed and you have received three consecutive, correct pay cheques);   
• Option 3 – I disagree with the validity or amount of the overpayment set out in Annex A and have attached supporting documentation. Failure to do so may result in the commencement of recovery action in accordance with section A.3.15.4 of the Appendix of the Directive on Terms and Conditions of Employment). *  

 

Important: Make sure you are very specific. Do not simply write, “I disagree with the overpayment” or leave it blank. If you are not specific, the Pay Centre will commence recovery.    

The overpayments should be numbered, so you can select A or B for each individual overpayment number.   

Examples of information you can write in the blank lines:   

Example: I believe I have already repaid this overpayment because I already repaid an overpayment for that period on X date... 

  
Example: I believe that the overpayment amount is wrong because I never actually went on leave from X date to Y date. I cancelled my leave prior to taking it but the paperwork wasn’t submitted properly to the Pay Centre by my manager...   

 
Example: I do not understand the information provided in Annex A. The amounts for X and Y don’t add up. Also, could you please provide me with the dates of the pay stubs on which I was paid this alleged overpayment so I can cross-check my records?  

 

Example: If the overpayment is beyond the six-year limitation period, you should include this paragraph:  

 
The alleged overpayment $___ contains amounts ($____) that are outside of the limitation period provided for under the Crown Liability and Proceedings Act. I believe that the employer is statute-barred from collecting this overpayment, per my union’s information: https://psacunion.ca/phoenix-overpayment-letter-update.   
 

Please provide me with a written confirmation of whether this debt will be deleted/adjusted from my pay file.   

 
You also have the right to file a grievance if you dispute your overpayment. Your local or component can help you with filing a grievance.   

 

 

 

7. Should I file a grievance to challenge the overpayment? 

It may be a good idea to file a grievance if: 

1. Your overpayment was calculated incorrectly, or is a duplicate. 
2. Any part of the overpayment is past the six-year limitation period. 
3. You relied on the correctness of your pay to your detriment. For example, the employer assured you that your pay was correct or you were unaware of the overpayment until now, and you made significant life decisions on that basis, or 
4. You would experience serious financial hardship if you had to repay the overpayment. 

Be mindful of the deadline for filing a grievance: For most federal public service workers represented by PSAC, that deadline is 25 days after the date on which the grievor is notified or on which the grievor first becomes aware of the action or circumstances giving rise to the grievance. 

Note that filing a grievance does not automatically stop recovery, so you should also make sure to fill out your Annex B.

8. Does filing a grievance automatically stop recovery of the overpayment?

No. The best way to ask for a stop in recovery is by filling out Annex B and stating why you disagree with the overpayment and need recovery stopped.  
 
However, you should still file a grievance to protect your rights if you dispute the overpayment. 

9. What’s the point of filing a grievance if it doesn’t automatically stop the recovery?

The grievance can be very useful. If your overpayment is incorrect or beyond the limitation period, your department may be able to resolve these issues or obtain clarification during the grievance process.  

A grievance can also be useful in getting you compensation for your troubles “after the fact” – for example, if the employer mistakenly recovered an overpayment from you and this caused you financial troubles, you may be able to get a reimbursement of any amount incorrectly taken from you plus damages through your grievance.  

10. What do I do if none of these situations applies to me, but I don’t want to repay my overpayment because it was the employer’s fault for introducing Phoenix?

Unfortunately, unless your overpayment is older than six years old or you have a specific concern with your overpayment or a legal basis to challenge it, you have a legal duty to repay the overpayment. However, you still have the right to ask for a lower repayment rate if the proposed rate would cause you hardship. We agree that this is frustrating, because you didn’t ask for this overpayment and it’s a waste of your time and energy to deal with it.   

If you’ve had extensive Phoenix issues that have interfered with your ability to live your life, we would strongly encourage you to make a severe impacts claim application.

11. I can’t afford the 10% recovery rate. What do I do?

The default recovery rate is a deduction of 10% of your gross biweekly pay. Most overpayment letters will contain a section referred to as Repayment Options, usually just below the list of overpayments.  

In this section you can ask for a 5% recovery rate which can be approved by the Pay Centre. If you cannot afford 5%, depending on the letter there will be an Option B or C where you can indicate that you cannot afford the proposed recovery and it would cause you personal and financial hardship.  

If that option is not included in your letter, or you do not have enough space, write “see attached”, or cross off what is written and write “see attached”.  In the body of your email or on a separate sheet indicate that you cannot afford the proposed recovery and it would cause you personal and financial hardship.  

12. What if the employer is asking me to repay an overpayment that is older than six years old (“statute-barred”)? ​

If the employer has waited longer than 6 years to begin recovery of your overpayment, they cannot force you to repay it or recover it without your prior agreement. 

Recent overpayment letters sent out by the Pay Centre and the employer have removed any reference to the possibility that your recent letter may contain amounts that are past the 6-year limitation period for recovery. Therefore, some members may not be aware that there is a limitation period for recovery of overpayments and that they may not be legally required to repay all or part of their overpayment. 

Repayment of an overpayment that is past the limitation period is voluntary; this means the employer cannot force you to repay it. 

We believe that you have the right to know whether or not your overpayment is past the limitation period. 

This article will help you figure out whether your overpayment may be past the limitation period. Our team can also help you determine this: please contact us and select the option “Phoenix – Overpayments.” 

Members are now advising us that the Pay Centre has started recoveries of statute-barred amounts without notifying them. The Pay Centre may tell you these amounts are automatically recovered because they are less than 10% of your gross bi-weekly pay. In this case, file a grievance. You have the right to know about any pending payroll deductions.   

If you have any questions, or you would like us to review your recent Overpayment Letter to confirm if any of the amounts are statute-barred, please contact us and select the option “Phoenix – Overpayments.”  

Include your Personal Record Identifier and a copy of your letter, if applicable.  A member of our Phoenix team will be in touch with you as soon as possible. They will review your overpayment letter, make recommendations and suggest next steps if applicable.  

13. I’m not sure if my overpayment is past the limitation period.

Go to the Contact Us section of our website and select the option “Phoenix – Overpayments.” A member of our Phoenix team will normally be in touch with you within 24 to 48 hours. They will review your overpayment letter and help.

14. I need help with filling out my Annex B. Who do I contact?  

First read our instructions in the question How do I fill out the Options page (Annex B)? above. 
 
If you have any further questions or need help around what to write in the blank lines, contact the Phoenix team via the Contact Us section of our website and select the option “Phoenix – Overpayments.”  A member of our Phoenix team will normally be in touch with you within 24 to 48 hours. They will review your overpayment letter and help.  

15. Can the employer forcefully recover the overpayment from me if I don’t respond?

If you ignore the overpayment letter or dispute it without providing any information, the employer will usually commence recovery. The employer, being the Federal Government, has several ways to recover the overpayment. 

PSAC has seen the employer recover overpayments from former employees through the Canada Revenue Agency (from your tax refunds), through your pension, or from money owed to you upon retirement/when you leave your job (severance pay or Phoenix general damages).  

For current employees, the employer will make the recovery of the overpayment from your salary or from any money due to you, such as retroactive pay.  

16. Why am I being asked to repay an overpayment, when the employer actually owes me more money?

This is a frustrating situation. The employer is currently doing the “overpayment recovery project” by year, going through employees’ accounts and identifying overpayments (starting in 2016, then 2017, etc.).     

The employer is not automatically reconciling your entire pay file before it asks you to repay an overpayment because they’re looking at one year, and one set of pay transactions, in isolation.  

It’s very possible that, looking at your pay file in its entirety, there are some unprocessed pay transactions that the employer owes you money for, which would reduce or eliminate your overpayment debt, or which would result in the employer owing you money.     

If you believe that the employer owes you money, you can ask them to reconcile your entire pay file.     

If you agree with the overpayment, but want to repay it once your file has been reconciled depending on the format of your letter:  

If you are a current employee, with a pre-June 2023 letter, choose Option 1 (I acknowledge the overpayment). Under Repayment Options choose “After all 3 conditions are met (flexibilities are applied).” If you pick this option, the employer should not commence recovery until the following three conditions are met: (a) they’ve paid you all outstanding monies owed to you; (2) you’ve received three consecutive correct paycheques; and (3) you’ve established a recovery agreement. 
 
If you are a current employee, with a post-June 2023 letter, acknowledge the overpayment as described in FAQ. Then under the repayment options select Option B or C depending on how your letter is worded.  

If you are a former employee, you will not have the same repayment options in your overpayment letter, in any of the pre/post-June 2023 templates. If you agree with the overpayment but want to repay it only once your file has been reconciled, you should choose Option 1 (I acknowledge the overpayment) and add in a note somewhere on the page that you want your file reconciled before you are required to pay back the overpayment, as you believe the employer owes you money.  
 

If you disagree with the overpayment: 

You can choose Option 2 or 3 depending on your letter (disagree with the overpayment) and write in detail why you disagree with it. Add in that you also want your entire pay file reconciled because it is the employer that owes you money.    

 
Note that disagreeing with the overpayment solely on the basis that the employer owes you money for a different period does not normally stop the recovery of the overpayment. To pause recovery, you will need to include specific details about why the overpayment listed in the letter is incorrect or past the limitation period.  
 

PSAC believes that it is wrong for the employer to demand you repay an overpayment before they’ve reconciled your pay file in its entirety and paid out any underpayments, they owe you. We are challenging this heavy-handed approach through our policy grievance.  

17. This has been incredibly frustrating. How can I get compensation for all of my Phoenix-related losses?

If you’ve had serious losses and impacts to your life and health due to Phoenix, we strongly encourage you submit a severe impacts claim.  

In addition, all current employees automatically received general damages on their paycheque in March 2021. If you’re a former employee, we strongly encourage you to apply for up to $2,500 in damages you may be entitled to, as former employees did not have general damages sent to them automatically. You may also qualify for other claims.

18. Who do I contact?

You can reach out to your local or component for assistance with filing a grievance. 

You can also reach out to our Phoenix team through the Contact Us form and select the option “Phoenix – Overpayments.” Please include your Personal Record Identifier and a copy of your overpayment letter, if applicable. A member of our Phoenix team will be in touch with you within 24 to 48 hours.