Is overpaid wages after employment ended a debt?

babyharry5

Very simple - your only obligation should be to repay money that you know is not legally yours regardless of any 'loopholes'!
The "local authority would have to accept this loss" - well thats taxpayers money so give it back!

notanothergreyhair

babyharry5 wrote: »

Very simple - your only obligation should be to repay money that you know is not legally yours regardless of any 'loopholes'!

That was my point, but not put so simply

meerkat2007

I hope I don't pay my council tax to that local authority.

Horace

One hopes that you put this overpayment into an interest earning account? You should pay back the money as it is not rightfully yours and you allowed your old company to contine paying you which is fraudulent. What you should be doing is paying the money back to them because it never belonged to you in the first place. If you had the sense to put the money into an interest earning account then all well and good because you will have earned some interest on it, thus you can return the overpayment to your old company.

If you refuse to pay and make some ridiculous claim through the county court then you could end up with egg on your face because despite the error being on behalf of the employer, you have in essence taken money which isn't rightfully yours and you could end up with not only having to pay the money back, you could pay interest and costs both yours and theirs plus any fine the court wishes to impose on you.

Do the decent thing and pay it back.

natanddan1

my wife was overpaid by the local Authority to the tune of £400. She sent a letter to them and enclosed a cheque for the full amount. The cheque was never cashed and that was 6 years ago. However, we feel happy in the knowledge that we did the right thing and put the owness back on to the LA:D

Mrs_Sparkle

I think legally you don't have a leg to stand on because you have always known the money wasn't yours.

kluged

In response to some of the comments made:

1) The local authority was not my employer. This seems to have been misunderstood. I worked for another organisation (which is not funded by tax payers money for those of you worried about your council tax etc). The organisation I worked for paid the LA to handle payroll for them. The contract that my former employer had with the LA for this payroll work stipulates that the LA have to accept the loss if they make a mistake. This was what I was referring to in my initial post when I stated that the LA has to incur the loss. I apologise if I was not clear enough. So, in other words, if the LA is unable to recover the money from me they have to reimburse my former employer out of their own funds because it was their mistake.

2) Yes, I have put the money into a savings account whilst I sort this out. If I have to pay it back I might as well make the most of it in the meantime whilst things are being sorted out.

3) natanddan1: In the course of my research into this matter I have ascertained that the statute of limitations on this type of debt is six years, same as for an unsecured credit debt. You might want to keep this in mind if that LA ever do contact you requesting repayment.

4) Horace - thank you for your comments but if you review my original post it seems that you have misunderstood what I have said. I did not commit fraud by "allowing" by former employer to keep paying me - it is entirely their mistake and I notified them of the overpayment as soon as I discovered it. When I referred to a county court claim I was referring to it in the context of the LA making a claim against me to recover the money, not me making a claim against them. A county court claim is the legal means they would have to use in attempting to recover the money if I refused to pay - as I am no longer employed by the organisation the usual method of recovering the debt from ongoing wages does not apply.

5) I have looked into "undue enrichment" and it certainly appears to apply to my case. I am not sure whether I should consider this as being more significant than my rights in terms of contract law as referred to in my earlier posts.

Finally, to those who appear angry at my attempt to take advantage of this overpayment, please keep in mind that, at the end of the day, I am not responsible for having created the problem in the first place. I did not overpay myself. The mistake by the LA is what has caused this problem.

In any case I have decided that the issue is more complex than I can fully comprehend on my own. Today I got in touch with a friend of a friend who works as a CAB debt adviser. It is not something they tend to come across very often but I was advised that my employment contract would be the most important thing in this case and, since it doesn't contain a clause regarding repayment of salary overpayments, then I should consider myself not liable for the debt.

I was also advised to contact the LA & inform them that my contract does not stipulate that I have to pay back any owed money to my former employer. I was advised to ask them for proof that I am liable to address the debt in this case which I believe is standard practice for any debt (ie, make them proove you owe it before paying anything).

I would be interested to hear any views from other debt advisers if you think this is incorrect.

stevemLS

The issues around clauses relating to overpayment are a red herring. Your contract of employment stipulates the amount you are to be paid in return for your work.

You received more than that sum.

You want them to prove that you owe the debt - they simply need to demonstrate that you have received more than was due to you.

In law, where a payment is made by mistake it *may* not be recoverable if you did not, nor should have known that a mistake has been made. That is clearly not the case in this instance and you have acknowledged that by "immediately" notifying the local authority of the overpayment.

There is nothing either legally or morally difficult here. It is just the same as when accounting errors lead to massive deposits in people's bank accounts that they know nothing about. They knew the money wasn't theirs, didn't belong to them, therefore, it is repayable.

If the local authority have to issue proceedings against you, you will be liable for their court fees and, depending on the amount of the claim, legal costs - this will more than wipe out the interest you have made.

delboypass

Lol

if you go to court you will look like a !!!! and they will 99% win

Its as if a Bank has put money in your account by mistake..they can just claim it back...and im surprised it would have to go as far as a country court before they get the money back...

But if you like your name trawled through the paper for not paying back overpayments...everyone to their own...

You might get lucky and get some free money though but at what cost to others..so in essence it does depend on your morals and if you want to try and keep it or fight it...

Money is money and makes the workd go round

jsmesjoy

babyharry5 wrote: »

Very simple - your only obligation should be to repay money that you know is not legally yours regardless of any 'loopholes'!
The "local authority would have to accept this loss" - well thats taxpayers money so give it back!

Yes i m agree with you.