Media Statement

Govt to write off small Novopay overpayments

Minister Responsible for Novopay Steven Joyce today announced the Ministry of Education will not be seeking to recover small overpayments to school staff that are uneconomic to recover.

“In order to assist the recovery of the system and clearance of the overpayment backlog, I have taken the pragmatic decision that the Ministry should not seek to recover a number of smaller overpayments that would take up a lot of time for little benefit to any party,” Mr Joyce says.

“Since Novopay went live in August last year there have been thousands of school staff around the country that have received overpayments as a result of errors with the payroll system. Recovering the smaller overpayments would’ve cost the Education Ministry more money than the amounts that have been overpaid and slow down the clearance of the backlog.”

The errors where recoveries will not be sought are:

· A public holiday related defect which caused 7,949 staff to be overpaid an average of $6.05 for a total of $48,106

· A previously-advised voluntary bonding configuration error that occurred in Pay Period 1 which caused 1,478 staff to be overpaid an average of $64.75 for a total of $92,323

· All other overpayments where the individual overpayment amount does not exceed $100; to a maximum of $300 in a calendar year. It is estimated that this will involve writing off a total between $200,000 and $300,000 known overpayments.

Individual staff will be notified of overpayment debt write-offs when they occur, and that the Ministry will not be seeking the repayment. However, staff will still be able to pay it back if they wish to. Schools will also be advised and school budgets will not be affected. The amounts written off will be deducted from Ministry baselines.

Mr Joyce says that the write-off is estimated to reduce the number of known significant overpayments immediately from 13,200 to around 10,000 (these numbers excluded the 7,949 listed in bullet point one above). He says that list will still take considerable time to clear and will involve recovering some millions of dollars.

“This has always been expected to be the slowest and hardest part of the remediation programme,” Mr Joyce says. “These pragmatic steps will help speed it up but we have a long way to go on clearing the overpayments.

“We make further decisions in regards to low-value write offs, if other particular examples come to light during the overpayment clearance process.”

Mr Joyce says the use of debt collectors to recover overpayments caused by Novopay remains suspended by the Ministry until further notice.

ENDS

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