Overpayment

[beachlover.iow]

I have just been over paid.

I work for an agency therefore I do not have a permanent contract. Nor do I have regular hours. So may work 45 hours one week and have nothing the following week!

I worked a shift Christmas day through into boxing day. I knew the pay would be enhanced for this shift so I agreed. (x 3 the regular pay ) Except someone messed up and payed me x 9 my regular pay!! and nine times the tax too!

The agency was closed over Xmas but they paid me automatically via BACS. My wage slip was also sent automatically during the Xmas period. When opened the wage slip I nearly died...they had paid me a gross of £1897 or £68.50 an hour!!! I knew it was wrong but I could not contact the agency as they were shut for the Xmas period.

Subsequently the BACS payment went through and my overdraft has gobbled up most of the money. I now owe the agency £1178

 

They have admitted verbally that someone has pressed the wrong button on SAGE...But now they are demanding that I pay £100 per week back and they are going to deduct this from my weekly wages starting this week!! This is a silly amount to pay back as I usually only earn 170 per week and that is only if i get work....what will happen on the weeks I do not get any work!!

 

I have explained that I cannot possibly pay back £100 per week as this would leave me short of money for essentials like food..But they insist!!

 

I acknowledge that I was not entitled to the money and that I have to pay it back. But they money has gone and not because of any extra extravagance...just usual overdrafts and direct debits!

I cant possibly afford to pay back 100 quid per week but they have sent me a letter saying they will deduct this beginning this week. (this Friday and today is Wednesday) I am really worried as I only earned 112 last week and they are going to take 100 quid of it so I will only have 12 quid to last the week!!

 

I need to know how much is an an acceptable amount. However this is difficult to determine as with agency work I could be offered 45 hours work one week and nothing the following week! I was think of a percentage of my weekly earnings??

 

I need some advice please!

Edited January 8, 2009 by MARTIN3030
edited so post moves make sense.

[shywazz]

Hiya

 

Put in writing that you understand the money needs to be re-paid, due to payroll mistake, make a offer deemed okay with urself, taking into account your basic needs per week, also state the amount is subject to certain percentages dependant upon how many hours you work, for example, if you work and earn £200 one week there take say £25 if you only work low hrs another wk and say earn £120 there deduct say £15 work a % to enable such, to which you both agree, otherwise you will be working for next to nothing, untill the amount is repaid. Failing that, have you thought of going with another agency to get work, but still honour the over-payment to the said agency, untill repaid.

I'm sure if you arrange a meeting with them, between urselves you should be able to come to a muntal arrangment. Speak to someone senior in the agency, most likly there will go spare at such a error on the payrolls side.

[beachlover.iow]

Hi Shywazz

 

thanks for your advice and i have slept on it and thought it through. I admit that I have to pay the money back but I have encountered another problem.

 

please bear with me and bear in mind this only one weeks work!!

 

For one weeks work I was paid a gross (MIS)-payment of £1878.75 but they took Income tax and national insurance and a student loans as deductions based on this amount. So my net (mis)payment was 1080. This is the amount that went into my bank account.

My gross (real) pay or what I should have earned is 708.75 . Now one should think it is easy to work out how much I was overpaid. we should simply deduct the (mis) payment from what I should have actually been paid. £1878 minus 708.75 equals £1170 which is the overpayment that I have to pay back. But wait....

The agency want me to pay back the gross overpayment of 1170 but the I only received £1080 in my bank as net pay??? The rest has gone to tax and deductions!!

I am totally confused why do the agency want me to pay back more in real terms than I was initially paid. I think it is because of income tax an national insurance. I have had a go at working it out by hand. (see bellow)

The agency said i could wait and claim the tax and insurance back in April. In the meantime I am expected to pay back money that I need to feed myself and this will be at a deficit of £90 plus the wages I would have earned that week.

Is there any advise ....as my bank manager pionted out when i asked if he could extend my overdraft to pay the angency back!! "it seems a little crazy to have to pay back an overpayment of £1170 when all that went into my bank account was £1080."

* Calculation Note*

 

Gross pay should have been 708.75

Actual gross pay 1878.75

 

Gross pay Overpayment difference 1878.75 -708.75 = 1170

Tax should have been 118.75

Actual Tax 570.95

Overpayment on Tax

570.95 -118.75 = 452.2

NI should have been 67.50

Actual NI 84.24

Overpayment on NI

84.24 - 67.50 =16.74

Student loan should have been 37.82

Actual SL 143.00

Overpayment on SL

143 - 37.82 =105.18

Net pay should have been 484.68

Actual net pay 1080.56

Overpayment on net pay

1080.56 - 484.68 = 595.88

 

 

 

Therefore net pay should have been 484.68 Actual net pay 1080.56

Therefore Overpayment on net pay is only 595.88

[beachlover.iow]

Can you see why I am confused.

The tax man has taken a big slice of the overpayment and I am expected to pay it back!! At a deficit!!

Surely this cant be right!

I have written to the agency asking for an explanation but they say that if I pay £100 per week the tax will correct itself. (which I do not understand! I am trying to raise the £1170 to pay them back in a lump sum but I am reluctant because in real terms....I did not receive 1170...i only received 1080...

Does anyone understand why I have to pay back more than I actually recieved??

[beachlover.iow]

Hi guys,

I have an overpayment issue too.

I need expert advice as I am in a bit of a pickle due to amount of tax and insurence that was deducted. I do not dipute that I was over paid. I know i have to pay it back.

But the company is trying to recover the gross amount overpaid. The gross amount far exeeds the net amount. The rest has gone onIncome tax and National insurence deductions.

I have posted this issue elsewhere on the forum

I was wonering if I should start a new thread somewhere and if you could advice me as to where i need to post.

I promise I wont be rude:D

[MARTIN3030]

Your posts merged into your own thread here.Please stick to one place as its difficult for others to help when your posts are all over the place !

Edited January 8, 2009 by MARTIN3030

[Guest Alison82]

Hi I am in the same position as you, my agency wanted to take £100 every week, I offered £20 then £50 as that was the max I could afford, we then settled at £75 which I can't really afford but I will just have to sell a few bits on ebay.

 

I know how you feel I provided them with a very detailed breakdown of my expenses which helped a bit as they lowered it by £100 a month. I don't see why you should pay the tax!!

 

Call ASCS or get some legal advise, they need to claim it back from the tax man not you.

 

My thread

 

http://www.consumeractiongroup.co.uk/forum/employment-problems/175794-overpayment-help.html

 

Good Luck

[beachlover.iow]

Hi Alison thanks for your reply.

I have taken your advice and written to the agency.

I have pointed out how absurd it is to pay back £1170 (this is the gross overpayment before tax) when the money that went into my bank in real terms was only £1080. The tax and national insurance deductions amounted to £798. (more than I earned in real terms!)

They are saying that if they deduct £100 quid a week and no tax for the next 11 week all will correct itself.

I don't understand payroll programs but I can not see how or why I should payback more money than actually went into my account.Or money that went to the tax man on income I did not actually earn.

 

I have also offered to payback at 10% of my weekly earnings. So If I earn 200 quid one week I will only pay back 20 quid and I earn nothing the following week then I pay nothing.

 

I am a bit upset that they took the £100 quid this week without my written approval. They took it out of my total payments some of which was my petrol claim which is non-deductible. This doesn't seem fair as I paid for the petrol upfront in order to visit their clients. So they are even taking money out my non-earned income. I wonder if they are allowed to do this by law?

 

Sorry for the rant.

How did you manage to get around the overpayment in relation to the tax ?

 

Thanks for your help

[Guest Alison82]

Hi my agency didn't say anything about tax, I am just paying back what went into my account. I'm not an expert but it seems to if they are taking money out of your wages which you don't owe them (the extra £170 odd) then that is some form of theft. I would say to them that you are going to seek legal advise as how to reclaim the deduction through the court system and report them to the inland revenue as it seems they are getting a free tax break and you are being hit twice.

 

Maybe go and see your local citizens advice, or call ASCS, also it is work speaking to the tax office 08453000627

[midge61]

Hi

 

Some CAB offices have employment specialists. Try to get an appointment with one.

 

I am in a similar situation with my employer who claims I have been over paid for the last 18mths and wants 5K back off me.

 

My appointment is tomorrow. If I get any info that may help you I will post tomorrow.

[Guest Alison82]

Whats wrong with these companies!! they get on my b****y nerves why can't they just do their job properly and pay people correctly!! sorry rant over

[beachlover.iow]

Hi Midge

 

WOW a 5 grand overpayment. Thats also 18 months you have overpaid in tax too.

It will be interesting to see how they work out how you repay them and claim the overpayment in tax and NI .

[midge61]

The overpayment has another 2k on top which is the overpayment of tax,NI and pension!

[pippadeee]

The agency should only reclaim the net overpayment, not the gross. It is for the agency to correct their mistake not for you to have to reclaim overpaid tax/NI back. The agency is acting contrary to HMRC guidelines on the matter which you might want to point out to them.

 

Write formally to them asking them to recalculate the overpayment on this basis so you pay back only the net amount you received as is the correct way in respect to overpayments.

[beachlover.iow]

Hi Pippa

I have taken your advice and asked the agency to recalculate the overpayment and include tax and other deduction.

For example, the angnecy say I was gross overpaid by £1170

But the deductions amounted to Tax 570.95 plus NI 84.24 plus student loans of £130. The amount that went into my bank was £1080. but the agency want me to pay back the gross overpayment of £1170 more than the net pay £1080 that went into my bank!!

I dont have an issue with paying back money I did not earn but...I have an issue with paying back more than went into my bank account!! So does my bank manager who said your crazy to ask for an overdraft for£1170 when all that was paid in was £1080. Surely I cant be expected to pay back more money at a deficit than i actually received in real terms.??

In real terms my gross wages should have been £705. If i take into account a massive over estimate on tax and other deductions I should have been paid, like into my bank account, about £490 quid...

 

Its such a darn mess!!

I have made an appointment with the CAB and The tax office to see if they can make sense of it.

In the mean time the agency have docked 100 quid from my pay this week even though i did not agree. I had 125 quids in earned pay and about 100 quid in expenses such as petrol and car parking tickets. They docked the 100 out of the total paid sum....even though petrol and expenses are not tax deductible....

The whole affair seems biased and unfair!!

[beachlover.iow]

The agency should only reclaim the net overpayment, not the gross. It is for the agency to correct their mistake not for you to have to reclaim overpaid tax/NI back. The agency is acting contrary to HMRC guidelines on the matter which you might want to point out to them

 

What are the HMCR guidelines and can you help me to locate them?

Thanks

[Tobecontinued...]

I had this problem last year, interesting also with an Agency...

 

They only overpaid me £780 in total. Without any warning got a call from a woman in their office threatening me with Debt collection agencys and bailiffs if i didnt pay it back.

 

This happened because the company i was at throught he agency decided to offer me perm contract, they told the agency this 3 times twice on the phone and finally in a letter. basicly the agency did not take any notice and continued paying me (but not sending payslips) so i didnt realise i was being paid £145 a week as i dint pay much attention to my bank statements back then.

So they had made a mistake i understood i had to pay it back as it wasnt mine but my HR manager told me they could not deduct money from my wages without my written consent, also she told me they could not force me to pay any amounts back a month as long as i was paying something towards it, so that is what i did just paid money to them when they get irate and start sending letters and that keeps them quiet. After all its not your fault they overpaid you and you could say you thought they were good will payments. they cant argue with you as it is them who made the mistake.....

 

Anyone know if i have this about right or am i completely wrong

[rory32]

What are the HMCR guidelines and can you help me to locate them?

HMRC = Her Majesty's Revenue and Collections. The tax people to you and me.

 

So they had made a mistake i understood i had to pay it back as it wasnt mine but my HR manager told me they could not deduct money from my wages without my written consent, also she told me they could not force me to pay any amounts back a month as long as i was paying something towards it, so that is what i did just paid money to them when they get irate and start sending letters and that keeps them quiet. After all its not your fault they overpaid you and you could say you thought they were good will payments. they cant argue with you as it is them who made the mistake.....

 

Anyone know if i have this about right or am i completely wrong

In order to show that an overpayment is not recoverable, then the employee must demonstrate three things. Firstly, it must be shown that the overpayment was the fault of the company and not the employee. Secondly, it must have been reasonable for the employee not to know that they were being overpaid. Thirdly, the employee must have acted to their disadvantage or the assumption that the payment of salary was correct (for example by spending the money!). The most common difficulty for employees is the second condition since it is often obvious when an overpayment has occurred. It is not acceptable for an employee to assume that they have received a substantial increase in pay unless there is some reason to believe that this is the case.

 

The Employment Rights Act 1996 provides that it will not be an illegal deduction from wages to recover an overpayment from salary. This means that an employer is not prevented from deducting the overpayment from future wages or salary provided that this is done reasonably over a period of time and not done in such a way as to amount to a breach of trust and confidence in the employment relationship. The interesting point about the Employment Rights Act is that overpayments can be recovered from future wages whether or not the overpayment itself is recoverable from the employee on the basis of the three point test set out above.

 

In practice, the employer can simply recover an overpayment from wages and the onus is on the employee to then make a legal claim to attempt to claim back the money that has been wrongly deducted. This involves bringing a claim to the County Court and can be rather complex. The employee will have to show that all of the three conditions outlined above have been met and this is often difficult.

 

Assuming that the employer intends to recover the overpayment from wages, then there is no fixed rule about the rate of recovery and whether this should be in one lump sum or over a period of months. However, there is a general rule that an employer must not act in such a way as to undermine the employment relationship or to breach trust and confidence.

 

Regarding what you HR dept told you about written consent I believe they are refering to the "protection of wages" rules in the Employment Rights Act 1996 which provide clear rules about making deductions from wages. In general, deductions may only be made from wages if the law permits it, or if your contract of employment specifically permits it, or if you and your employer have made a written agreement that permits it.

 

However, the protection offered by the Act does not extend to an overpayment of wages or expenses. An overpayment is specifically excluded from protection and therefore written consent is not required.

[flyingdoc]

The problem arises that when a person is in debt - money going directly into a bank account is immediately seized by the bank and the employee cannot do anything about it - even if they recognise the overpayment, once the bank has the money getting it back is not always possible.

[Tobecontinued...]

The difference in my case being that i no longer work for the agency as the company the agency put me with took me on a permanent contract but the agency continued paying me. They cant deduct money from my wages because i no longer work for them.

in effect i was being paid twice once by the agency and then by my employer.

Also they kept paying my after my contract with them had expired, they knew when this would happen so why continue to pay me?

It was most definetly not a rolling contract.

[rory32]

In that case their options are limited to either coming to an informal agreement with you about paying it back or taking you to court.

[patdavies]

HMRC = Her Majesty's Revenue and Collections. The tax people to you and me.

 

Her Majesty's Revenue and Customs

[midge61]

Hi all

 

Well I have been to see the cab specialist and basically I have been told there is not a lot I can do.

 

There is no limit to how far they can go back and while estoppel is an argument that can be used apparently there have been several cases where it has failed and so it can be costly and very difficult to win.

 

I have been advised to raise a grievance and hope that I can appeal to their better nature!

[beachlover.iow]

Thanks Rory

Thanks flying Doc.

Your information is invaluable.

 

I need some time and space to think about this!!

 

I was worked 26 hours at triple my noraml rate (7.050)

[beachlover.iow]

Thanks Rory

Thanks flying Doc.

 

Your information is invaluable.

 

But I need some time and space to think about this!!

 

A new development in the negotiation ....the agency said I could use my unused holiday pay to pay back the overpayment....I told them to F*** O** I work 40 to 50 hours per week and I need my entitlement to holiday...They cant take my holiday pay....CAN THEY???

 

Give me about 24 hours at triple my normal rate of pay and i will get back to you with an overpayment including tax, NI and student loan deductions which should put you about double the times in debt that you actually got paid. .. (sorry I was being cynical)...

 

Realistically I have written to the agency and said that it is absurd to expect me to pay back more money that I did not received in real terms. I dont want to give up my holiday entitlement. The agency payroll officer has phoned me and said she agrees. I cant possibly be expected to pay back an overpayment of 1170 when i only got 1080 in my bank.

 

She is gonna punch it all back into SAGE and see what happens.

 

Let see what happens!!

 

Hold your breath guys