Recovery process for Phoenix overpayments – FAQs

In the fall of 2021, the recovery process for Phoenix overpayments was launched for employees who the Public Service Pay Centre believed were overpaid by the Phoenix pay system in 2016 and onwards. Employees were sent overpayment letters and were given 4 weeks to respond by accepting or challenging the amount or the validity of the overpayment. Failure to respond would result in the recovery of the stated overpayment.

While some members have received an overpayment letter accurately representing an overpayment amount, others are likely to have received a letter with an amount that is incorrect or cannot be validated by them. There are others still who would have received an overpayment letter while they have outstanding pay issues that must first be addressed by the Public Service Pay Centre.

PIPSC has filed policy grievances due to the employer’s approach to recovering overpayments and the many issues our members have been facing. The policy grievances challenge the coercive manner in which the recovery of overpayments is being done. Examples of this include the employer's failure to provide employees with accurate information or repayment options for the alleged incurred overpayments.

If you have mistakenly received an overpayment letter or received an inaccurate overpayment letter, please review the following FAQs. These FAQs outline how to respond to an overpayment letter and provide guidance on next steps. PIPSC remains available to support all members in resolving their Phoenix pay issues.

I did not receive the gross amount indicated in the overpayment recovery letter, what do I do?

We recommend you select the option that indicates you do not agree with the amount - there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3. Your reply should include any and all rationale, evidence, or questions you have on the overpayment and why it is missing details or why you believe it may be incorrect. A compensation advisor from the Public Service Pay Centre will be in contact with you prior to initiating recovery. The compensation advisor should be able to provide you with more details about the alleged overpayment (such as when it was paid to you, the amount and on which pay cheque etc.). If the compensation advisor fails to provide you with any details to allow you to understand your overpayment or reasonable repayment options, we ask that you please contact our Phoenix help team and they will assist you with the next steps, including filing a grievance.

Note that if you do not provide any rationale for disputing the amount, the Pay Centre will proceed with the recovery of the amount indicated in the letter without flexibilities. You cannot simply disagree with the overpayment without a rationale or refuse to repay it.

What does it mean if I am being asked to pay back a gross amount instead of a net amount?

For any overpayment that is more than 3 years from the end of the year in which you were overpaid, you will be asked to pay back the gross amount, which is the amount received before taxes and deductions were made. This will ensure that proper repayment has been collected and will reconcile your pay file. An amended T4 for the year in which you were overpaid will be issued to you and you can then ask CRA to adjust your income tax and benefit return for the year in question. This is done in accordance with Canada Revenue Agency rules.
You will only be asked to repay the net amount if the recovery of the overpayment occurs less than 3 years from the end of the year in which you were overpaid.

Can I claim an out-of-pocket expense claim if it relates to an overpayment issue?

While you cannot file an out-of-pocket expense claim for an overpayment issue because one of the criteria set by Treasury Board is that an employee must have experienced an underpayment, you may be eligible to file a claim for reimbursement for tax advice. Moreover, you may wish to look at the process to claim compensation for severe impacts to determine whether your specific situation meets the established criteria to file a claim. You can find more information about the Phoenix damages claims processes in our Phoenix Compensation Agreement FAQs.

I did not receive any or enough details confirming the overpayment amount indicated in the letter, what do I do?

We recommend you select the option that indicates you do not agree with the amount - there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3. Your reply should include any and all rationale, evidence, or questions you have on the overpayment and why it is missing details or why you believe it may be incorrect. A compensation advisor from the Public Service Pay Centre will be in contact with you prior to initiating recovery. The compensation advisor should be able to provide you with more details about the alleged overpayment (such as when it was paid to you, the amount and on which pay cheque etc.). If the compensation advisor fails to provide you with any details to allow you to understand your overpayment or reasonable repayment options, we ask that you please contact our Phoenix help team and they will assist you with the next steps, including filing a grievance.

The overpayment amount is correct on the letter, but the Public Service Pay Centre owes me more than the overpayment, what are my options?

Overpayments and underpayments are dealt with separately by the Pay Centre. If the overpayment amount itself (not taking into consideration the underpayment) is correct, employees are encouraged to return the acknowledgement letter within the deadline specified in the overpayment letter and choose to access the repayment flexibilities under the 3 conditions being met to ensure reconciliation of your pay file. Recoveries of these amounts will only start when:

  • all your outstanding transactions have been addressed;
  • you have received 3 consecutive correct pay cheques;
  • and a recovery agreement has been established.

If the overpayment in itself is incorrect, we recommend you select the option that indicates you do not agree with the amount - there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3. A compensation advisor will be in contact with you prior to initiating recovery. 

Section A 3.15.4.4 of the Treasury Board Directive on Terms and Conditions of Employment states that alternate timelines for recovery of overpayments may be established as required to facilitate the effective resolution of issues related to Phoenix. As a result, employees should request alternate timelines to ensure their pay owed is rectified prior to the unnecessary overpayment recovery. If the compensation advisor fails to provide you with information to assist in the resolution of your other Phoenix pay issues (monies that may be owed to you) or reasonable repayment options and timelines, we ask that you please contact our Phoenix help team and they will assist you with the next steps, including filing a grievance.

I continue to experience errors in my pay, what should I do?

As a first step, employees should raise the issues they are experiencing to their manager. Employees should then report their pay issue by submitting a  Phoenix feedback form followed by a pay action request (PAR) form. Employees should contact their compensation advisor or the Public Service Pay Centre to correct errors on their pay. If they are unable to help, contact our Phoenix Help Team by filling out our Phoenix Pay Help Form. Please include any pay escalation number you may have. Our team will then reach out to you to discuss next steps.
 

I have responded to the first overpayment letter by disputing the validity of the amount, but then I received a final notice saying that the recovery will start on the next pay cheque. 

Contact the Public Service Pay Centre or your compensation advisor for review and escalation. You may also wish to signal the issue to your direct management and ask for their assistance. Please also reach out to our Phoenix Help Team by filling out our Phoenix Pay Help Form and include any pay escalation number you may already have. Our team will assist you with the next steps, including filing a grievance where appropriate.

The overpayment letter includes pay errors that occurred more than 6 years ago, why is the employer trying to recover an amount for errors they made more so long ago?

If the overpayment, or part thereof, was deposited into an employee’s account more than 6 years prior to the date of the overpayment letter, employees should select the option that indicates they acknowledge the letter but are in disagreement with the validity of the amount (there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3) in their response to the Public Service Pay Centre. Their reply should include that they are disputing the amount (or part of the amount) based on the fact it is statute barred under the Crown Liability and Proceedings Act and should therefore not be recovered as they do not consent to repayment. If employees receive a reply back from a compensation advisor stating the amount is not statute barred or being coerced into repayment, they should immediately reach out to the PIPSC Phoenix Help Team to discuss next steps.

It is important to note that the 6 year clock starts from the date in which the overpayment was deposited/received by the employee - not the time period in which the payment was recorded in Phoenix. If any payments were deposited more than 6 years before the date of the letter, it goes beyond the expiry of the limitation period of the Crown Liability and Proceedings Act. As such, it should, generally speaking, not be recovered by the Public Service Pay Centre. We therefore recommend that you reach out to the PIPSC Phoenix Help Team to discuss next steps.

The amount to be recovered exceeds 10% of my gross biweekly pay and will cause me financial hardship, what are my options for repayment?

According to the Treasury Board Directive on Terms and Conditions of Employment under section A.3.15.4.4, alternate timelines for recovery of overpayments may be established as required to facilitate the effective resolution of issues related to Phoenix.

Employees with overpayments greater than 10% of their gross biweekly pay and who are eligible for flexibility measures should receive a letter advising them of: the amount owing, the cause of the overpayment, and the flexible repayment options available to them. You should return the acknowledgement letter within the deadline specified in the overpayment letter and choose to access the repayment flexibilities. Recoveries of these amounts will only start when:

  • all your outstanding transactions have been addressed
  • you have received 3 consecutive correct pay cheques
  • and a recovery agreement has been established

You can request a modified recovery plan. For departments served by the Public Service Pay Centre, compensation advisors at the Public Service Pay Centre will have the authority to approve recovery plans. For departments that are not served by the Public Service Pay Centre, the departmental compensation advisor or other designated departmental personnel will have this authority.

If you are refused the possibility of a modified recovery plan, please get in touch with our Phoenix help team and we will assist you with the next steps, including, when appropriate, filing a grievance.

I refuse to sign and acknowledge this letter until I receive written confirmation that all of my pay issues have been resolved.

Signing and acknowledging the overpayment letter does not mean you agree with the letter itself or the amounts within. Failing to sign and acknowledge the letter may result in recovery being initiated without flexibilities and therefore a potential $0 pay cheque.

Employees are encouraged to sign the letter to ensure further recovery steps from the employer aren’t taken. Selecting the option that indicates you do not agree with the amount will trigger a review by a compensation advisor who will be in contact with you prior to initiating recovery - there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3. If you fail to respond to the letter, you are at risk of having the Public Service Pay Centre proceed with the recovery of the amount indicated in the overpayment recovery letter.

I have already paid back the amount that I was overpaid and was unaware of any pending overpayment.

We recommend you select the option that indicates you do not agree with the amount - there are different versions of overpayment letters depending on the circumstance of each case, it will be either option 2 or 3. Your reply should indicate that you already paid back the amount, the date in which it was repaid, and any evidence you have to support that claim. It may be that this is a different overpayment or an error from the Public Service Pay Centre, as such, it will be important to communicate to the compensation advisor what was already paid back and when. It will also be important to request all information and records to enable you to verify the accuracy of the amount. If the compensation advisor fails to provide you with any details to allow you to understand your overpayment or reasonable repayment options, we ask that you please contact our Phoenix help team and they will assist you with the next steps, including filing a grievance.

What is PIPSC doing to protect members’ rights related to this overpayment recovery effort?

PIPSC has filed policy grievances to challenge the coercive manner in which the Public Service Pay Centre is approaching the recovery of overpayments. They are failing to provide employees accurate information and repayment options of the alleged incurred overpayments. The policy grievances further challenge the notion that the Public Service Pay Centre is seeking to recover overpayments that occurred more than 6 years ago, in excess of the statutory limitation period. Additionally, PIPSC continues to have regular discussions with the Employer and provide feedback on how the overpayment recovery process can be improved.


If you received an overpayment recovery letter seeking amounts paid more than 6 years ago OR if you have been unable to get details proving the alleged overpayments, please contact our Phoenix help team to discuss your options. If appropriate, we will file an individual grievance on your behalf.

I am retired and received an overpayment letter. What are my options? 

Retired employees are subject to the same options as regular employees. For any questions on the letter they received, they are encouraged to review the FAQs.

I don't want to repay my overpayment as the employer should have been more diligent in the first place. 

PIPSC has filed policy grievances to challenge the coercive manner in which the Public Service Pay Centre is approaching the recovery of overpayments. They are failing to provide employees accurate information and repayment options of the alleged incurred overpayments. The policy grievances further challenge the notion that the Public Service Pay Centre is seeking to recover overpayments that occurred more than 6 years ago, in excess of the statutory limitation period. Additionally, PIPSC continues to have regular discussions with the Employer and provide feedback on how the overpayment recovery process can be improved.

If you received an overpayment recovery letter seeking amounts paid more than 6 years ago OR if you have been unable to get details proving the alleged overpayments, please contact our Phoenix help team to discuss your options. If appropriate, we will file an individual grievance on your behalf.

Does filing a grievance stop the overpayment recovery process? 

No. The overpayment recovery process will still continue unless employees respond with the option that disputes the validity of the amount (this will be option 2 or 3 depending on the version of the letter in which you receive), thereby disagreeing with the amount or establishing an alternate recovery/repayment period. This is the best way to challenge an overpayment. Filing a grievance can at times assist in having pay issues resolved internally or assist in receiving clarification on your pay file, however, will not prevent the overpayment recovery process from occurring or expedite resolution in your file in most cases.