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Overpaid work benefits - where do we stand?

(7 Posts)
Basketofchocolate Thu 21-May-15 21:09:20

DH has discovered that there was an error made in his travel allowance and highlighted it to his employer.

This may have been since 2012 but no one is sure when and how much just yet as there is little written down in a formal and exact way.

I have looked up the legal obligations and everywhere seems to say that we definitely owe it back but can pay in instalments if company agree (it is a season ticket cost so a few thousand - eek!) and we would need to as do not have the cash to hand at all right now.

However, it seems that that is the case in genuine overpayment of wages. Which, this isn't....it's a travel allowance. Does it fit under same rules?

We appreciate that we owe it, but just want to know how we stand legally so that we're in a better position to dictate repayment terms.

Melonfool Thu 21-May-15 21:40:16

Hard to answer without more detail - why does he get a 'travel allowance'? Is it essentially more pay, or is it pay back for a ticket (as expenses)? Is it taxed?

There is possibly one way he could suggest he doesn't need to pay it back and that is the doctrine of estoppel. If he believed the sum was correct and he reasonably relied on it then they could be estopped from reclaiming it.

See this article:

www.birkettlong.co.uk/site/library/legalnews/recovery_of_overpayment_of_wages.html

Also, if nothing is written down he could possibly claim the sum is now contractual by custom and practice.

It's tricky to give good suggestions without knowing more about what this sum is, how and why he gets it etc.

Basketofchocolate Thu 21-May-15 21:52:04

Yes, it was taxed. He was given an allowance, but also had tickets bought for him by the company. It seems one of these was possibly overlapped - someone set up the allowance on monthly basis but due to confusion the ticket was also paid for directly by the company in two instances but the most recent was reimbursed to DH.

I would make it clearer, but struggling as not sure DH or the company are sure.

What does 'custom and practice'?

Basketofchocolate Thu 21-May-15 21:59:08

Also, it seems that the error was a couple of years ago....would that make a difference?

Melonfool Thu 21-May-15 22:08:45

Your OP implied the error was since 2012, so is it ongoing or was it a one-off? Your new post seems to suggest it was twice.

Did you read the link re estoppel as that answers your question on it being a couple of years ago.

You seem to be saying he realised it was wrong and pointed it out to them - is that what happened? If so, what did they do when he told them?

I don't understand what you mean by it being paid to him and overlapped and then reimbursed to him.

In your situation I would write to the employer and ask them to set out clearly in writing what payments had been made and what tickets provided at what times, where they think they overlapped and what they think my 'overpayment' might be. And I would state in this letter that I would object to any deduction from my wages until such letter was received and its contents agreed. I would write it in a conciliatory tone - saying I wanted to ensure everything was correct and was checking all my own records and would work with them to get it right and that I hoped any overpayment later discovered could be repaid in installments as it was so long ago and I have relied on the money assuming it was correct.

In answer to your direct question - yes, this is treated the same as salary. The link I gave above makes that clear.

Basketofchocolate Thu 21-May-15 22:14:44

Yes, I looked at the link, thank you.

That seems sensible. DH has worked out a few of the amounts on a spreadsheet, but since so much has gone on verbal agreements, 2-3 years ago he can't remember why some of the figures are odd - i.e. an allowance amount and a removal of travel expenses in same month. There should be one ticket a year paid for, but what happened exactly when he joined, he is not sure and the numbers don't make it clear from payslips and then tickets were bought on his behalf but he was also paid an allowance (and then deducted expenses) on a monthly basis. Looks like he was set up with a monthly instalment payment and the ticket was bought for him - a miscommunication between the ticket buyer and payroll in the company (not DH). DH was one who brought up discrepancy when asked about this year's payment for ticket.

It has implications of tax, child benefit, interest, etc. I guess too.....*bangs head against wall*

Melonfool Thu 21-May-15 22:26:45

Tax the employer will sort out.

Child bens - only affected if borderline higher rate tax payer and it took you into it and will now take you out again when deductions are made.

Interest - well, if you're getting more than .5% anywhere let me know where! I doubt that's an issue really.

It is a real nuisance having to pay back money when you had assumed everything was all fine.

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