Overpayment recovery process
Under Section 56 (1 to 7) of the Act, an employee who has been overpaid, regardless of the cause, is liable to repay the amount overpaid by deduction or deductions from any amount due to them, including any salary or benefits they are entitled to receive when ceasing employment.
Verifying an overpayment
Where an overpayment has occurred, it needs to be verified prior to any action being taken to recover the overpayment from the employee. Verifying the overpayment means confirming that the payroll details that resulted in the overpayment being created were entered correctly on the payroll.
It may be necessary to refer to any original documentation in the school or on the employee's personnel file relating to:
- allowances, salary, work schedule, leave
- correspondence to or from the employee relating to the above
If required, make the necessary adjustments to eduPay and view any certification messages the following day.
Notifying the employee of the overpayment
Where an overpayment has occurred, the person must be advised in writing, including details of the cause and the amount of the overpayment.
The employee must also be informed about:
- the requirement for the Department under Section 56 (3) of the Financial Management Act 1994 to recover overpayments regardless of the cause,
- the repayment options, and
- the provisions relating to an appeal for relief from the overpayment (see below)
Any correspondence should be sent by registered mail so that receipt of the correspondence can be tracked.
Seeking relief from an overpayment (appeals)
Under section 56 (6) of the Act, an employee (current or former) who has been overpaid and believes special circumstances exist can apply in writing to be relieved of the requirement to repay the overpayment.
A request from an employee for relief from repaying an overpayment must be in writing and preferably submitted through the school to ensure any further recovery action is not taken pending the outcome of the appeal. The school should record a general comment on eduPay and the employee’s personnel file that an appeal has been lodged.
Principals or managers have no legal authority to make decisions concerning appeals.
The appeal should be forwarded, with details of the overpayment, to People Services for appropriate action. Any additional information that should be taken into account in considering the request should also be provided.
In assessing the application for relief from repayment of an overpayment, the following will be considered:
- enduring financial hardship as distinct from periodic financial hardship
- reasons of compassion (for example, ongoing and debilitating medical condition or family distress)
If a medical condition is the basis for an application for relief, a statement from a medical practitioner must be provided.
Repaying an overpayment
Where an employee has not sought relief from repaying an overpayment or their appeal has been unsuccessful, repayment of an overpayment should commence as soon as possible, by way of salary deduction or personal payment.
An overpayment recorded on the payroll is the amount to be repaid by the employee. Repayment will be set at 10% of an employee’s gross pay unless otherwise agreed with the employee, however repayment should be negotiated at 100% recovery or as much as possible in order to recover the overpayment as quickly as possible.
Repaying by salary deduction
An employee currently receiving pay can elect to repay an overpayment by salary deductions from their fortnightly pay, either in a single amount or in regular instalments.
Salary deductions should be commenced where 14 days has elapsed with no response to any written notification to the employee regarding the repayment of the overpayment by way of personal payment(s).
As the rate defaults to 10%, any other rate will need to be entered manually. If a rate of less than 10% is agreed and the repayment period will be more than 3 months, provision should be made to regularly review the progress of the repayments with a view to increasing the rate to at least 10% as soon as possible.
Repaying by personal payment
An overpayment can be repaid by personal payment (EFT, cheque or money order) in full or by regular instalments (for example, fortnightly or monthly), preferably for the same amount each time.
If paying by EFT, there are 2 options available:
- Select Make a Payment and use Biller Code 124644
2. direct payment to the Department
- Account Name: SAL OP Revenue
- BSB: 033222
- Account Number: 020833
Note: The person should ensure that they include their employee ID number in the description line to assist in identifying the payment.
Cheques or money orders should be made payable to the 'Department of Education and Training' and sent to the school, in the case of school based employees. On receipt of each cheque or money order, the school administrator should:
- record details of the payment on the employee's personnel file. The record should include the amount and date of the payment, the remaining balance, and the due date of the next payment
- complete the Personal Repayment Advice Form
- send the completed form, cheque or money order to:
Department of Education and Training
GPO Box 4367
Repayment of the overpayment should be monitored on eduPay. Where instalments are being made, at least 1 payment per month must be received, unless exceptional circumstances exist. If no payment has been received for more than a month, a reminder letter should be sent to the employee. Sample letters, which can be modified as required, are available on the tab.
Employees on leave without pay or who have ceased employment
Where an employee is on leave without pay or has ceased employment, action should be taken as soon as possible to arrange repayment by personal payment(s).
Where an employee’s termination date is known in advance, action should be taken to ensure, as far as possible, that any outstanding overpayments will be repaid before the person ceases employment.
Once the person has ceased employment with the Department, the overpayment will be deducted from any monies owed (that is, unused annual leave, long service leave or salary loading allowance). If monies owing are insufficient to cover the overpayment in full, the repayment of the balance must be arranged with the person.
Any correspondence should be sent by registered mail so that receipt of the correspondence can be tracked. If the last known address of an employee is incorrect (that is, mail is returned), school administrators should make all reasonable attempts to locate the employee, including using the internet .
If the person has not responded to multiple letters or made a payment as requested, a copy of the overpayment documentation should be forwarded to Schools People Services with a request for further action to be taken by the Department, which may include legal action.
Legal action to recover overpayments
Legal action may be taken by the Department to recover overpayments when doing so is determined to be cost effective, in circumstances including where an employee or ex-employee:
- refuses to repay the overpayment, or
- cannot be located or has been located but does not respond to correspondence
Reviewed 26 October 2023