Employer overpayments

bigriggers

Hi,

My wife has recently discovered that her employer (a school, so by extension our local council) has made 3 months worth of overpayments totalling around £1500 after tax. When my wife went from full time to part time with maternity inbetween, the bursar did not contact the council to advise of the reduced hours. My wife did not notice until the 3rd month as she'd done some overtime the previous 2 months, and she was not 100% clear on what wage she could expect anyway, despite asking verbally. Thankfully she noticed it when she did, otherwise it could have been years before they noticed when she finally goes back to full time! :eek:
Anyway from what I've read on the internet we will have to pay it back which is fair enough, however I have a couple of questions:

1. How flexible does the employer have to be in regards to a payment schedule? Ideally we'd like 6 months or more as she is trying to pay off other debts.
2. In regards to the other debts, what happens to the extra interest that will be accrued while she is not paying it off? ie. If she has to pay it back within 3 months as a colleague suggested, that's 3 months where she'll be paying the minimum on her credit card as opposed to the usual £500, which ultimately means more interest added. Surely their mistake shouldn't cost her money?
3. I also read that you can ask for them to deduct tax from the total balance owed. How likely are they to agree?
4. What is the next step? Should we write to the council and outline our proposed repayment plan and the reasons behind it? We are currently "waiting for a letter" that the promised to send weeks ago with her revised salary on it, and how much she actually owes.

TIA,
bigriggers

January2015

See my responses in red below.

bigriggers wrote: »

Hi,

My wife has recently discovered that her employer (a school, so by extension our local council) has made 3 months worth of overpayments totalling around £1500 after tax. When my wife went from full time to part time with maternity inbetween, the bursar did not contact the council to advise of the reduced hours. My wife did not notice until the 3rd month as she'd done some overtime the previous 2 months, and she was not 100% clear on what wage she could expect anyway, despite asking verbally. Thankfully she noticed it when she did, otherwise it could have been years before they noticed when she finally goes back to full time! :eek:
Anyway from what I've read on the internet we will have to pay it back which is fair enough, however I have a couple of questions:

1. How flexible does the employer have to be in regards to a payment schedule? Ideally we'd like 6 months or more as she is trying to pay off other debts. Talk to the HR and/or payroll department at the Local Authority, i.e. bypass the Bursar. They should be more than happy to accommodate 6 months repayment schedule. If it is going to leave you really short each month ask for longer. It was their fault, not your wife's.
2. In regards to the other debts, what happens to the extra interest that will be accrued while she is not paying it off? ie. If she has to pay it back within 3 months as a colleague suggested, that's 3 months where she'll be paying the minimum on her credit card as opposed to the usual £500, which ultimately means more interest added. Surely their mistake shouldn't cost her money? They won't want to know about interest issues on your debts. As far as they are concerned she had the extra money up front so could have paid those debts down then.
3. I also read that you can ask for them to deduct tax from the total balance owed. How likely are they to agree? Not sure what you mean here. The balance owed will be adjusted for the tax overpayment, so essentially once the money is repaid your wife, and the local authority will be in the same position with pay and tax as they would have been had the error not occurred.
4. What is the next step? Should we write to the council and outline our proposed repayment plan and the reasons behind it? We are currently "waiting for a letter" that the promised to send weeks ago with her revised salary on it, and how much she actually owes. I would phone payroll and have a chat first. Your wife can always confirm the conversation in an email. Don't wait for letters.

TIA,
bigriggers