24 Jan 2018

Novopay chases teachers over historic over-payments

From Checkpoint, 5:38 pm on 24 January 2018

Novopay has referred a teacher to a debt collection agency because she owes money from four years ago when she was incorrectly paid sick leave. 

Ann, who only wants to be known by her first name, was paid three weeks' sick leave after she was in a car accident in 2014. 

Novopay contacted Ann in April last year, saying she owed $900 because she only had two weeks' sick leave at the time of the accident, and should have been paid by ACC. She said ACC told her she could not make a claim, as the accident happened more than 12 months ago. 

Novopay, which the Education Ministry took over in 2014 after a plethora of problems, has also contacted other teachers in recent months informing them of outstanding debts due to over-payments made three or four years prior. 

The Ministry of Education said in 2015 that staff owed it $2.5m due to over-payments. 

Teachers say they negotiated to pay back the money incrementally - usually at $10 or $20 a week - and some have spent two years paying it back.

But Ann is questioning whether they should have to pay it back at all. 

The government's employment website states under the Wages Protection Act 1983, an employer "must let the employee know the amount of the over-payment and that they're going to recover the over-payment no later than five working days after the over-payment was made".

"It doesn't state anywhere in there that they can send you to a debt collector four years later," Ann said. 

"I'm just not going to pay it … it's not like I did anything wrong. The school made a mistake and paid me too much sick pay, Novopay didn't notice anything, nobody told me to go to ACC, so I'm pretty sure if they take me to court it's just going to be waived."

NZEI Te Riu Roa President Lynda Stuart urges teachers to negotiate with Novopay about making increment repayments. 

But she says it was simply not good enough that Novopay was contacting people years after the payments were made, and the issues should have been sorted closer to the time.

The Minister of Education Chris Hipkins would not comment as he was yet to be briefed by his Ministry about the issues, and referred the matter to the Ministry.

Ministry head of education infrastructure Kim Shannon said, as of 17 January, debtors owed $3.17 million. 

The total payroll was $4.6 billion a year.

"The potential use of a debt collection agency is always a last resort in cases where the person concerned has not entered into a suitable repayment arrangement.

"Novopay makes every effort to encourage employees to repay their over-payment, and will tailor a repayment plan based on individual circumstances. The repayment plan for debt owed to schools must be agreed by schools ... As a last resort the over-payment may be referred to the debt collection agency if no arrangement to repay has been agreed."

She said if school employees believe they don’t owe a debt, the best thing to do is to contact the Novopay debt management unit to discuss any questions or concerns, or check with their school administrator.

Under the Limitations Act there is a 6-year period in which the ministry can review and collect the outstanding funds.

There are no fees or penalty interest added to over-payment debt.