Debt collection resumes for education payroll

  • Steven Joyce

The Minister Responsible for Novopay, Steven Joyce, says school staff who were overpaid by Novopay and haven’t responded to efforts to recover that money will now start being referred to a debt collection agency.

The use of debt collectors was suspended in March 2013 for school staff who were overpaid when Novopay was first launched, due to an unacceptable error rate and the consequent pressure placed on affected staff and administrators. Those who owed $100 or less had that debt written off.

“The payroll system has been working properly now for some time. The error rate is below 0.25 per cent, which is less than half of the 0.5 per cent acceptable error rate as defined by the Novopay technical review. It’s now sensible to look at how we’re managing outstanding overpayments where there is no arrangement to repay in place.”

“The vast majority of staff who received overpayments have been happy to work with us to sort that out. More than 80 per cent of overpayments have already been fully repaid ($22.7 million) or are in arrangements for repayment ($1.9 million.) But there’s still $1.8 million owed by 1,960 people from when Novopay started up until June 30th 2014, where no arrangement to repay the money has yet been made. We need to make every effort to recover taxpayer money that has been made in error.

“We’ve been talking to the sector about re-starting referrals to a debt collection agency and will continue to brief them as we work through the process.”

The referral process will involve the Novopay debt management unit contacting schools and affected school staff advising how the overpayment occurred, and the options available for repayment. Those staff will have reasonable time to decide how they want to respond, or to raise any questions.

“People who owe money will all be given the opportunity to enter repayment agreements and raise any questions or issues they have before referral to a collection agency.”

“In the past, the Ministry of Education and payroll operators have found most school staff do the right thing and repay the money which doesn’t belong to them. Only a very small number of people fail to enter into repayment agreements before the matter goes to a debt collection agency.”