Teachers underpaid by $12m

00:29, Feb 01 2013

The much-maligned Novopay system now owes almost $12 million to teachers who have not been paid.

Details of the sums teachers are being underpaid have been made public as education groups call for a deadline to have the payroll system fixed.

The latest figures come from the monthly Novopay debt ledger, released to The Press under the Official Information Act.

It reveals that as of January 6, 14,470 teachers were owed about $11.8m in wages.

''This figure is made up of notification by schools, manual payments made by the ministry, out-of-cycle payments, redirected bank payments and stop pays,'' Ministry of Education education workforce group manager Rebecca Elvy said.

"The total amount of these underpayments and non-payments is $11,773,509.84."


The Ministry of Education has been forced to pay out almost $2.5m in manual payments, which are made when the Novopay system fails to pay teachers and their school requests a manual payment.

Schools have paid almost $700,000 in manual payments to their staff to compensate for Novopay.

However, 532 teachers have been overpaid by more than $600,000.

Of that amount, about $336,000 has not been paid back to Novopay.

The $29m system has been plagued with problems since it was launched last August.

Minister Steven Joyce yesterday announced an investigation into its failings.

Fairfax revealed this week that Novopay's issues had several serious side-effects.

Bulk payments, to make up for weeks of not being paid, were pushing teachers into new tax brackets, leaving them out of pocket and unable to recoup money until filing a tax return at the end of the financial year.

Child-support payments were not reaching some recipients.

Payments were not being made to the ACC, superannuation funds, KiwiSaver and student loans, despite being taken out of wages and listed on payslips.

Teachers were losing thousands from being struck down the 12-step pay grade by a system "fix" and have to go to great lengths to prove their identity to have their pay readjusted.

Elvy said on Monday that ''initial problems involving payments to third parties such as the IRD have now been resolved''.

''The ministry has assured schools that all payments have been processed. No-one will have been financially disadvantaged,'' she said.

''There is often a lag between payments being made and showing up on the records of schemes such as KiwiSaver. This is unrelated to Novopay.''


Education groups have welcomed Government plans to deal with the beleaguered Novopay but want a deadline set for the payroll system to be fixed.

Teachers and principals are expecting major problems in the next pay round.

Cabinet minister Steven Joyce yesterday announced a ministerial inquiry and an internal audit into the flawed service, which has seen school staff go underpaid or overpaid for five months.

He said Novopay would be be scrapped if it could not be fixed, but there were no immediate alternatives.

New Zealand Educational Institute president Judith Nowotarski said people had put up with the trouble-prone system for too long.

"They have been paid wrongly and had their third-party payments affected, and this has caused a lot of people a lot of stress," she said.

School administrators and principals had been working long hours to deal with the errors, and the Government announcement was cold comfort for those still dealing with Novopay, she said.

"We need a deadline. This error-ridden system cannot go on." 

The Government's plan was welcome, but she said it must also consider compensating schools for the extra hours and money spent out of their own budgets.

Joyce said it was too early to deal with the issue of compensation.

In the short term, extra resources would be poured into improving the software, supporting schools, extending call centre hours and documenting the problems.

He said the taxpayer would foot the bill until contractual issues were resolved with provider Talent2.

Joyce said the amount would be "significant".

Although the contract with Talent2 could be broken, Joyce said, fixing Novopay was the easiest solution.

The Government has contracted Deloitte to carry out a technical audit of the system, which is expected to last two weeks and cost tens of thousands of dollars.

Accounting firm Ernst & Young is already auditing the ministry.

Joyce said it was "too challenging" to say when teachers would begin to be paid properly and conceded there was still "pain" in store for school staff.

"There's no easy answers here," he said.

Problems with Novopay emerged in September, a month after it went live.

Joyce said yesterday that ministers Bill English, Hekia Parata and Craig Foss signed off on Novopay, despite knowing there were bugs in the system.

English said officials advised Novopay was "ready to go", adding: "Of course, in hindsight we might have done it differently."

The Press