Banks step up to Novopay challenge
New Zealand banks are wading into the Novopay disaster to offer interest-free overdrafts to teachers and school staff running short on cash.
Problems with the Education Ministry's new payroll system have led to thousands of teachers paid incorrectly or not at all.
Some have reported being unable to meet mortgage payments or falling behind on hire purchase or credit card debt as a result of the cashflow squeeze.
The banks participating in the interest-free overdraft offer are ANZ New Zealand, ASB Bank, Bank of New Zealand, The Co-operative Bank, Kiwibank, SBS Bank, TSB Bank, and Westpac New Zealand.
They are offering six weeks of interest-free respite –until January 15 - up to the equivalent of any missed payroll payments.
Affected teachers and school staff have to provide evidence to their bank, for example a letter from their school, detailing how much they are owed.
Their bank will then arrange an overdraft facility on the account to which their salary is paid, or to another account by arrangement.
New Zealand Bankers' Association chief executive Kirk Hope said the banks had offered their support to help tide people over the holiday period.
"I encourage affected school staff to get in touch with their bank so they know they're covered and can have some peace of mind over the holidays," he said.
An independent review into the problem-plagued pay system will begin early next year.