Overpayments

Introduction

The information included in this Guide outlines the legislative and other requirements relating to the prevention and recovery of overpayments which will assist principals or managers and employees in understanding their responsibilities and obligations.

Principals or managers are responsible for ensuring that the employees for whom they are responsible are paid correctly. Payroll validation and certification processes are in place in all Department workplaces to assist with this. If an employee’s pay is not correct, an overpayment or an underpayment will result. An overpayment is defined by the Financial Management Act 1994 (the Act) '...as any money paid to him or her by the State to which he or she was not entitled…'.

Unpaid leave entered after pay finalisation results in an overuse of entitlement and is therefore not considered to be an overpayment of salary. As such, it is not subject to the provisions of the Act. Unpaid leave includes leave without pay, stopwork action, unpaid parental absence and personal leave (injury, illness or carer’s) where all credits have been exhausted.

The amount to which the person is not entitled is automatically recovered (immediate recovery) in the pay period when the unpaid leave is recorded on eduPay provided there is sufficient net pay to recover in full. Where the total value of the unpaid leave cannot be recovered in the pay fortnight the leave was entered, because the amount exceeds the available pay, the amount remaining is treated as an overpayment, and the normal recovery provisions apply.

Under the Act, overpaid monies must be repaid unless express approval not to repay is sought and received from the Minister’s delegate in the Department. An employee who has been overpaid and believes special circumstances exist can apply in writing to be relieved of the requirement to repay the overpayment.

There are a number of procedures and strategies that principals need to have in place to ensure overpayments are minimised, and where they do occur, they are recovered as quickly as possible. Until the outstanding amount of the overpayment is recovered the overpayment remains charged against the school’s Student Resource Package, therefore prompt action to identify and recover the overpayment is essential.

To assist HR Administrators who are involved in the management and recovery of overpayments, overpayment procedural information, including forms and standard letters, is available on the Resources tab.