ARCHIVED CD 2010-002

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February 26, 2010

SUBJECT: Change to Priority of Deductions

1. PURPOSE

1.1 The purpose of this directive is to provide clients with information concerning a change to the priority of deductions on supplementary payments. Where an employee has an outstanding net overpayment in the Regional Pay System (RPS) and there is insufficient pay to cover the overpayment and all authorized deductions, there is an order of priority in which deductions shall be taken from that payment.

2. BACKGROUND

2.1 In the past, the Treasury Board Secretariat (TBS) policy instrument "Priority in making deductions" was contained in the TBS Compensation and Pay Administration manual. However, in 2009, TBS transferred the responsibility to set this policy to Public Works and Government Services Canada (PWGSC).

3. POLICY

3.1 Where, for any reason, an employee has insufficient pay in a pay period to cover all current authorized deductions, priority is given to such deductions in the following order:

3.2. Deductions Required by Federal Statute

• Canada Pension Plan (CPP) / Quebec Pension Plan (QPP)
• Employment Insurance (EI) /Quebec Parental Insurance Plan (QPIP)
• Superannuation (current and arrears)
• Death Benefit

Amounts owing to the crown

• Overpayments of salary, including payment for unearned leave
• Rent and other benefits
• Advances and loans out of public money
• Parking
• Other debts collectable, pursuant to Section 156(3) of the Financial Administration Act (FAA) or by set-off on authorization of the debtor and approval of the Receiver General.

Other Deductions Required by Federal Statute

• Federal income tax pursuant to Income Tax Regulations (current, including provincial tax where federal-provincial collection agreements have been signed, and tax in arrears)

Provincial government tax

• Province of Quebec income tax

Compulsory dues to public service bargaining agents

Hospital and medical plan premiums

• Provincial hospital and medical insurance, or hospital insurance (outside Canada)
• Public Service Health Care Plan (PSHCP)

Life and other insurance premiums

• Public Service Management Insurance Plan (PSMIP)
• Disability Insurance (DI)
• Civil service insurance
• Veterans insurance
• Civil Service Mutual Benefit Society

Personal and miscellaneous

• Canadian Mortgage and Housing Corporation (CMHC) mortgages on houses in Gander, Newfoundland and Labrador
• Approved credit unions or co-operative societies
• Government of Canada annuities
• Canada Savings Bonds and Quebec Savings Bonds
• Fonds de solidarité FTQ
• Fondaction
• Voluntary dues to staff associations
• Ottawa Civil Service Recreational Association
• Charitable donations
• Olympic coins
• ECOPASS

3.3. Net Overpayment

In cases where a net overpayment resides on the Master Employee Record (MER) in element 953 (Net Overpayment current year) or element 954 (Net Overpayment previous year), the system will attempt to recover this amount from any available funds. So in situations where there are funds available, the system will recover the overpayment to the fullest extent possible. Under no circumstance can a payment be issued to the employee if there is still a balance in element 953 or 954.

4. PROCEDURES/INSTRUCTIONS

4.1   These changes will come into effect as of March 2, 2010.

5. INQUIRIES

5.1   Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.

Original Signed by
B. Fortin

Brigitte Fortin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference(s): CJA 9006-1