Recovery of overpayments of pay - DWP policy changes May 2008

Policy change from 1 May 2008

PCS has negotiated the introduction of a policy change for the recovery of overpayment of pay.

With effect from 01 May 2008 the policy and processes for dealing with overpayments linked to late or inaccurate input of absence will be changed so that overpayments of this type are treated in the same way as all other salary overpayments and will no longer be automatically recovered from salary. This means that if an absence related overpayment spans more than one pay period, or was paid more than one pay period ago DWP will not recover the overpayment automatically. Instead the employee service centre will write to the individual and advise them that they have been overpaid and set out proposals for recovery. The individuals affected will have the right to renegotiate alternative repayment, or if they consider it appropriate to appeal against the overpayment.

The policy change is published on the DWP intranet under salary policy/recoveries from pay policy (para 3).

The only exemptions to the revised policy are:

  • where the overpayment occurs because of late input of an unauthorised absence, or
  • the overpayment is caused by late input of absence and the employee is leaving the department

In these circumstances the overpayment will be recovered in full from the next payment of salary. There will be a message on the payslip when this happens.

Arrangements for cases prior to May 2008

The employee service (ES) centre communications team has issued guidance in a weekly communications update (w/c 21 April 2008) to all ES contact centre staff that:

"For salary payments made prior to 01 May 2008, when the individual contacts us and advises that the recovery has placed them in financial difficulty, we must offer them a hardship advance with recovery staggered over a number of months to be agreed with the individual when the overpayment spans more than one pay period or was paid more than one pay period ago."

Recovery procedure changes

Recoveries from pay procedure (para 2) has been amended from 1 May 2008. This procedure applies when automatic recovery policy (see below) does not apply.

The employee will be sent a letter to notify when the overpayment will be recovered. If the employee does not respond, the recovery will be made in full from the first available pay run, unless the employee wishes to negotiate reasonable instalments. As a guide the following are deemed reasonable:

  • overpayments are recovered over the same period as the overpayment occurred, but not normally exceeding twelve months. Or
  • at a rate of 10% of gross salary – this is more beneficial than net as income tax and national insurance contributions will then reduce the amount.

Recovery will not commence where an employee appeals, until that process has been completed.

Automatic adjustment policy

The automatic adjustment policy is as stated in recoveries from pay policy Para 2:

"When an overpayment occurs in any one pay month, an automatic adjustment is made from the next month’s salary to recover the overpayment in full."

PCS advice and support

PCS advice on recovery of overpayments of pay was provided to branches in circular DWP/BB/133/07 which included a copy of the treasury guidance for recovery of overpayments, “government accounting”.

Further PCS guidance will be provided for branches.

Evidence of problems with recovery of overpayment policy, procedures or advice should be provided to PCS DWP group office.

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