Phoenix leads to persistent end-of-year tax questions
Union asking for exemptions for government workers being forced to return gross pay — money they never got
As Michele Charrier gets ready to welcome in 2018, she's still haunted by 2016 income tax nightmares caused by the Phoenix payroll system.
For Charrier, a program manager with Health Canada in Ottawa, her problems started at almost exactly the same time her department switched to the Phoenix system in the spring of 2016.
"I realized I was being paid twice — being paid for my basic salary and my acting salary, and this went on for eight months," said Charrier. "Now we're almost at the end of the tax year again. It's been almost two years. My problem is still not resolved."
Double trouble
At first blush, eight months of double pay might not seem like a big problem, but trying to put a stop to the extra income — and then trying to calculate how to give back the extra money — has resulted in a prolonged, complicated mess.
At one point, the pay centre asked her to repay the gross amount of $45,000, even though she'd only received less than half that amount in net pay.
She's been told she'll get the money back after her taxes are filed.
"Who's going to pay the amount between what I netted and what I grossed? That's $25,000 or so. So I'm asking the question: Who is going to recover this money on my behalf? Is it CRA (Canada Revenue Agency)? Is it the government?" asked Charrier.
She said she did file her taxes for 2016, even though she knew the numbers were wrong.
"I never got a revised T4 and I had to submit my taxes using this fictitious amount or gross amount and I ignored my letter from CRA that I had to pay taxes on it, because I'm not going to put money on something I don't really owe," said Charrier.
200 emails, no resolution
A year has passed since her double payments stopped, but nothing has been reconciled and Charrier said the 200 emails between herself, managers, the union, and the pay centre haven't led to a satisfactory resolution.
Charrier's case is not unique.
Executives at the Public Service Alliance of Canada, the biggest public sector union in Canada, are frustrated with the protracted, tax-related, Phoenix problems facing members.
"What we're asking for is that this government, who administers the tax legislation, provide an exemption, because under the income tax act it does say the gross payments must be paid back," said Chris Aylward, the union's national executive vice president.
"In these extraordinary circumstances, we're very sure that the government can provide for some kind of an exemption around that."
But Aylward said one of the most unfortunate consequences of the Phoenix debacle is the loss of trust when it comes to the government's accounting systems and ability to get it right.
"It's completely idiotic. I think It's completely unfair for this government to come out and say, 'Just trust us,' when there is absolutely no trust," said Aylward. "There is no confidence in what may happen, come tax-filing season."
'Keeps me awake at night'
At the end of November, the government reported the total number of outstanding financial and non-financial Phoenix claims had reached 551,000 — affecting approximately 156,000 government workers, more than half the public service workforce.
The federal government has set up a web page and infographics to answer Phoenix tax questions.
Susan and Dale Skaarup, both public servants in Ottawa, are still trying to figure out what seem to be never-ending Phoenix tax questions due to Susan's overpayments.
"It's very stressful. It keeps me awake at night if I happen to start thinking about it. I can't pay back $28,000. I never got it," said Susan, an employee at the department of National Defence.
Dale, who actually works for the Canada Revenue Agency, said they can't get clear answers about their taxes.
"There are a number of things with our income tax that we've been trying religiously to make sure are up to date and accurate," he said. "This is going to put it all sideways for the next year at least into the future until it's been resolved."
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