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1.0 Background

An overpayment occurs when benefits are paid to a beneficiary who has no entitlement or when benefits have been paid in excess of entitlement. Overpayments are usually detected by staff who work in program areas. Once an overpayment has been detected, Finance Division is notified so that the appropriate action can be taken to deal with the overpayment. Finance Division can take one of the four following actions:

1. Collect the overpayment

Finance Division can collect the full amount at once if possible or enter into a repayment schedule with the Veteran to take it out of their payments over a period of time.

2. Write off the overpayment

Write off is an accounting action that applies primarily to uncollectible debts. It does not forgive the debt or release the debtor from the obligation to pay; nor does it affect the right of the Crown to enforce collection in the future.

3. Forgive the overpayment

Forgiveness is the deletion of a debt that extinguishes the debt, waives the right of Her Majesty to reinstate the debt, and permits both the Crown and the debtor to remove the debt from their accounts.

4. Remit the overpayment

Remission is similar to forgiveness and involves the cancellation of or release from an otherwise enforceable debt, tax, fee or penalty. It differs from forgiveness in that remission relates to budgetary expenditures while forgiveness relates to non-budgetary expenditures.

The Government of Canada has provisions for the remission of overpayments on the following basis:

  • the overpayment cannot be recovered within the reasonably foreseeable future;
  • the administrative costs of recovering the overpayment are likely to equal or exceed the amount to be recovered;
  • the repayment of the overpayment would cause undue hardship to the person or a beneficiary; or
  • the overpayment is the result of an administrative error, a delay or an oversight on the part of an officer or employee of the federal public administration.

For the year ending March 31, 2011, 134 overpayments were remitted totalling $763,865. As noted in Table 1 below, the dollar amount and number of remissions has been steadily increasing over four of the past five years. In 2010/2011, the dollar amount and number of remissions declined. However, a backlog of over 200 remissions exists, which could make this number much higher, if they had all been processed.

Table 1 – Remissions Processed (2006 – 2010)
Fiscal Year Amount Number
2010/2011 $763,865 134
2009/2010 $813,669 247
2008/2009 $511,716 222
2007/2008 $425,547 193
2006/2007 $458,039 174

Source: Finance Division.

Remissions are processed at head office and Kirkland Lake. Remissions for Veterans Independence Program (VIP) and War Veterans Allowance, which are administered in the field, are processed by the Kirkland Lake Regional Office. Remissions over $5,000 for WVA and VIP are sent to head office for approval and returned to Kirkland Lake for filing. All other remissions are processed by Head Office.

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