OVERPAYMENT POLICY. Director of Finance

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1 OVERPAYMENT POLICY Sponsor: Director of Finance Author: Head of Finance Version: 3.0 Status: Approved by Audit Committee Date: August 2016 Next Review Date: August 2019

2 Section Contents Page No. 1. Aim 2 2. Introduction 2 3. Scope of Policy 2 4. Legal Position 2 5. Responsibilities 2 6. Process 3 1 Page

3 1. AIM 2 Page The purpose of this policy is to ensure there is a consistent approach to overpayments and to ensure that errors are promptly identified repaid appropriately. 2. INTRODUCTION 2.1. This policy outlines the procedures for the recovery of overpayments made to staff, when they have received, or suspect that they have received, payments in excess of their entitlement The Trust s Standing Financial Instructions state that overpayments should be detected (or preferably prevented) and recovery initiated. Therefore if members of staff have received public money to which they are not entitled, they will be asked to repay it in full. 3. SCOPE This policy applies to all employees of Worcestershire Health and Care NHS Trust regardless of status, or type of contract held. 4. LEGAL POSITION The Trust reserves the right to make deductions from salary where there has been, for whatever reason, an overpayment to salary, expenses or other emoluments in excess of the employee s contractual entitlement. Overpayments will be recovered in accordance with the principles outlined in this document which apply to all staff in line with Section 14 of the Employment Rights Act 1996,taking into account the Terms and Conditions of Employment. 5. RESPONSIBILITIES 5.1. Trust Worcestershire Health and Care NHS Trust will continuously keep its systems and controls under review to prevent overpayments from arising. Should an overpayment arise then once identified, it will be recorded and analysed with action taken to minimise or prevent any future occurrence. Particular attention will be given to ensuring staff appointment forms, staff leaver forms, amendment to contract forms and timesheets are completed correctly with appropriate authorisation. In turn, these forms must be submitted in time and entered onto the HR/Payroll systems in good time for the change to be made by the necessary date. The completion of accurate workforce returns, checking of nominal rolls and budgetary statements are also key to this issue. Managers, HR, Finance and Payroll all have responsibilities to ensure due process is undertaken Responsibility of Managers It is the responsibility of Managers to ensure that: a. Changes to employee contracts, including terminations are submitted to the HR department in a timely manner within the agreed and published timetable. b. Leavers are informed of any final salary adjustments for annual leave. c. Monthly budget reports are reviewed for any pay errors or anomalies and the Finance Department alerted to anything identified.

4 5.3. Responsibility of the Individual Employees and Ex-Employees It is the responsibility of the individual employee to: a. Ensure that they understand their salary entitlement. b. Check their payslip every pay period to ensure that it is accurate. c. Raise pay anomalies with the payroll service desk. The Theft Act 1968 indicates that although an individual may not set out to obtain the additional salary intentionally, by keeping it and treating it as their own (i.e. spending it), they may be guilty of theft. A leaver from the Trust s employment is also responsible for checking that their final salary payment is correct and that they do not continue to receive payments from the Trust after they have left. Equally, failure to declare an obvious overpayment could be construed as fraud and will be referred to the Local Counter Fraud Specialist for detailed investigation. It may also result in formal disciplinary action and civil recovery for the individual/s concerned Responsibility of the Local Counter Fraud Specialist All NHS organisations are duty bound by the Public Accounts Committee to recover overpayments in full. The Local Counter Fraud Specialist will investigate all cases of suspected fraud or theft Responsibilities of Trust s Human Resources It is the responsibility of the Human Resources team to: a. Ensure information is input into ESR in an accurate and timely manner within the agreed and published timetable. b. Ensure that employees are made aware of any appropriate salary changes in writing. 6. PROCESS 6.1. Process for resolving payment errors with current staff a. Employees will be advised in writing of the details of the overpayment before automatic recovery takes place. If the employee provides consent to NHS Shared Business Services (SBS) to repay in full, this will be recovered as a salary adjustment but still reported as an overpayment case. b. The overpayment for current employees will be calculated as the gross value rather than the net amount (after tax and national insurance) that the employee has received. Calculating the gross value ensures that the overpayment can be processed by payroll with minimal delay. As the overpayment is recovered the payroll system will automatically reduce the employees tax and national insurance charge as appropriate. 3 Page

5 c. Where a payment error has been made, payroll will explain how the payment error has occurred and explain the repayment options. The normal process is to pay the underpayment or reclaim the overpayment in full at the next pay interval. d. Where the overpayment exceeds 50% of the gross monthly payments, the overpayments team will look to discuss and agree a repayment plan. e. Where agreement cannot be reached to make a repayment within three pay periods, repayment terms up to nine months can be agreed; or longer in exceptional cases that are agreed individually by the Trust s Financial Accountant. f. Where a significant salary overpayment occurs over more than one month and the employee has not advised the Payroll Department, the Trust may alert the Local Counter Fraud Specialist (see paragraph 5.4) to conduct an investigation. g. Raising a fraud investigation does not automatically result in a person being charged with a criminal offence. If, during the course of an investigation, evidence indicates that the case is not suitable for criminal charges, the investigation will be closed and the overpayment recovery process continued. h. A without prejudice clause will be included in all overpayment letters which states This does not affect any other action, including proceedings in a criminal court which may be taken in this case. This clause is to ensure that criminal action is not precluded and can be considered at any stage of the investigation Process for Leavers a. Where an overpayment has occurred, and an employee terminates employment before the completion of the agreed and pending recovery then the balance will be recovered in full from the employee s final pay or any subsequent payments made after leaving. Wherein this has not been possible and or there is an outstanding balance the recovery process at paragraph 6.3 will be followed Process for Ex-employees a. When a payment error is identified for an employee who has already left the organisation, the SBS Payroll Team will calculate the net amount of the overpayment and an invoice will be raised to the individual. b. Queries regarding the overpayment will be referred back to NHS SBS Overpayments Team; technical based queries will be referred to the Payroll Team for a satisfactory conclusion. d. In the event that a repayment plan cannot be agreed or the debtor defaults on a repayment plan then recovery may be pursued by the Trust through a Debt Collection Agency, NHS Local Counter Fraud Service and the Courts. 4 Page