Nicholas Jones is a New Zealand Herald political reporter.

Novopay millions being paid back slowly - if at all

Novopay Minister Steven Joyce. Photo / Mark Mitchell
Novopay Minister Steven Joyce. Photo / Mark Mitchell

Nearly half of the millions of dollars mistakenly overpaid to teachers by Novopay has not been given back - with repayment rates as low as $2.50 per week agreed on.

The Government is yet to recover nearly $1.5 million in confirmed overpayments by its troubled schools payroll system.

The true total could be much higher after it admitted a further 8500 potential overpayments have yet to be calculated.

In announcing the latest update on the payroll system in July, Novopay Minister Steven Joyce said it was "continuing to perform better".

However, new details show the difficulty in clawing money back nearly a year after Novopay's introduction.

One individual still owes $32,000 and 716 people who were overpaid a total of $953,000 have not entered into a repayment agreement, information released to the Weekend Herald under the Official Information Act shows.

Labour's education spokesman, Chris Hipkins, said the figures demonstrated the ongoing and expensive debacle of Novopay.

In many cases people would be unaware they had been overpaid. Others would not want to give back money until it had been properly squared against earlier underpayments.

"Novopay has been a very expensive failure. It is still continuing to cost a lot of money. It could have been avoided."

Since Novopay went live in August last year to June 23 this year, there have been overpayments to 11,643 individuals totalling $3,059,000.

Around $1,492,000 of that has yet to be paid back. Partial repayments have been made by 364 individuals, who still owe $396,000 - with repayment rates ranging from $5 to $1029 per fortnight.

In releasing the information, the Ministry of Education said around 8500 potential overpayments had not been calculated or entered into the debt management system.

Overpayments must be identified by the ministry, a school, employee, or Talent2 - the company behind Novopay - to be registered.

Mr Joyce was assigned to sort out the Novopay problem by Prime Minister John Key after it developed into a major ongoing headache for the Government.

He said the amount still to be repaid was not overly concerning.

The ministry had reported that there was no unwillingness by people to pay, but the process could take time.

The 8500 potential overpayments were being resolved and put in the repayments queue at a rate of 800-1000 a week.

"I think you'll find that what you are really seeing is just a lot of work-on, it's not that a bunch of people are running around refusing to enter into agreements."

Mr Joyce said he did not know the circumstances behind a repayment rate as low as $5 per fortnight.

"Some people may not be in work at the moment, for example. They tailor each repayment to the person's situation."

The nearly $1.5 million in overpayments still outstanding does not include a previous Government write-off of small overpayments totalling $440,000. That was done because the cost of pursual exceeded their value.

NZEI union membership general manager Andrew Casidy said repaying money could be complex, especially if a teacher had also been underpaid. Those situations took time, and many back and forth letters before repayment began.

Payday frustration had been minimised, however flow-on problems, such tax overpayments on incorrect pay, continued to plague teachers.

The Inland Revenue Department and Ministry of Education had set up teams to address these issues, however Mr Casidy questioned whether they were resourced adequately.

"The side of the coin within the ministry [is] about trying to get repayments done. The other side is how many conversations has that teacher had with the payroll administrator and the principal at that school?

"How much has that diverted them from their real job?"

Pay slips

• Nearly $1.5m in overpayments not recovered
• Some repayments rates as low as $5 per fortnight
716 people overpaid $953,000 have not entered into a repayment agreement
$32,000 - largest amount still owed

Source: Ministry of Education, data to June 23, 2013

- NZ Herald

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