Recovery of Amounts Due to the Crown

Date:

To: Heads of Human Resources; Directors/Chiefs of Labour Relations and Compensation

This bulletin is intended to provide clarification in cases of recovery of amounts due to the Crown.

The Financial Administration Act provides the discretionary authority and the Directive on Terms and Conditions of Employment provides direction to recover an overpayment of salary, wages, pay and allowances from any money due or payable by the Crown to the person to whom the over-payment was made.

Current procedure is to recover an overpayment from the first available funds.

In cases where there is an outstanding balance to recover where there are no available funds from which to recover, the procedure has been to send a series of letters requesting payment.

In the case of recovery of overpayments of employees’ salary, wages, pay and allowances, recovery action needs to be taken within six years of when the overpayment occurred, in accordance with the Crown Liability and Proceedings Act.

The limits provided under the Crown Liability and Proceedings Act may be extended if the debtor acknowledges the debt or if the Crown initiates collection proceedings within the limitation period by taking tangible actions and procedures to collect the debt.

As a result, departments must exercise due diligence with respect to recovery of overpayments. Further, concrete steps to collect the debt need to be taken within the six year limitation period, which may include letters that outline steps as to how the overpayment will be recovered. Particular attention needs to be made to the recovery steps to be taken in cases where recovery cannot immediately be made through deductions from salary.

An attempt to recover the overpayment needs to be made in all cases. Employees should be contacted and efforts should be made to have the employee expressly acknowledge the debt and to begin by at least making a partial payment.

There may be cases where the limitation period has expired, no acknowledgement of the debt has been made and no proceedings have been taken. In such cases, other options such as a remission order or a debt write-off may be explored with the assistance of departmental Legal Services. Any actions for the write-off or remission of employment-related debt would require a submission and the approval of Treasury Board.

For further clarification please contact the Compensation Management Mailbox at: Contact Interpretations by E-mail Interpretations@tbs-sct.gc.ca or the Director, Financial Authorities and Operations at: Contact Financial Authorities and Operations by E-Mail fin-www@tbs-sct.gc.ca.

Original signed by

Kevin Marchand
A/Director
Compensation Management
Core Public Administration
Compensation and Labour Relations
Office of the Chief Human Resources Officer

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