# 2020-177 Pay and Benefits, Income tax refiling expenses - CAF mismanagement of pay accounts, Recovery of overpayment

Income tax refiling expenses - CAF mismanagement of pay accounts, Recovery of overpayment

Case summary

F&R Date: 2021-11-03

The grievor experienced a number of pay adjustments over several years because of the decision to implement Specialist pay to the members of the Army Communications Information Systems Specialist (ACISS) occupation. The grievor was advised that he had received an overpayment of approximately $6,000. Upon recalculation, he was advised that he now owed approximately $14,000. He argued that his pay was mishandled and that there should have been no doubt as to his entitlements before the funds were released to him. As redress, he sought to repay only the original overpayment amount of $6,000.

The Initial Authority (IA) asked the Director Military Pay and Allowances Processing (DMPAP) to conduct an audit of the grievor’s pay. DMPAP explained that the higher amount owed included tax adjustments that should be offset by a tax credit once the grievor submitted revised tax returns. While the IA acknowledged that the grievor was not responsible for the errors to his pay, he found that the grievor had a financial obligation to return pay that he was not entitled to receive.

The Committee noted that the grievor experienced financial hardship because of the mismanagement of his pay account and found that he had been aggrieved by these errors. Notwithstanding, the Committee found that the grievor owed a debt to the Crown. The Committee explored the possibility of remission of the grievor’s debt under the Financial Administration Act (FAA), but noted that the extended recovery plan at a low rate would sufficiently help minimize the hardship experienced by the grievor. The Committee did not recommend that the Canadian Armed Forces (CAF) apply for remission of the grievor’s debt under the FAA.

The Committee noted the difficulty associated with refiling multi-year tax returns and ensuring that these are done correctly. Given the CAF’s culpability for the grievor’s pay error issues, the Committee found that it would be fair and appropriate to reimburse the grievor for any expenses he might incur for the services of a tax professional. The Committee alternatively recommended that the Final Authority consider granting an Ex Gratia payment to address the stress, anxiety and expense caused by the mismanagement of the grievor’s pay account.

Page details

Date modified: