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Overpayments, cost corrections and payments on hold
Procedure summary
Published On
Aug 28, 2025
Purpose
To complete the Cost Adjustment Script and determine if the cost adjustment will be cost-corrected (removed) or classified as a collectable overpayment.
Description
Cost adjustments may occur when changes are made to a claim that affect previously issued payments. These adjustments follow one of two paths:
A Cost Adjustment Script A Cost Adjustment Script is automatically generated either when a compensation rate or a key date on the claim is changed resulting in an overpayment. Key dates include, but are not limited to:
Date of accident (DOA)
Date of layoff
Return to work date
Date of death
Manual Overpayment Management Some overpayments do not trigger a Cost Adjustment Script. These include adjustments related to:
Non-rate-based payments, such as mileage
Employer overpayments
Once the script is completed, it may result in an overpayment. The overpayment can be either forgiven or recovered as a debt owing. A supervisor typically reviews the decision for accuracy, after which the claim owner sends a letter to the worker outlining a repayment plan or confirming debt forgiveness.
Medical Aid is responsible for all service provider overpayment matters including creating and collecting overpayments. Any inquiries from a service provider regarding an overpayment should be redirected to Medical Aid.
Key information
Under Sections 142 and 143 of the Workers' Compensation Act (WC Act), if a worker or a worker's dependant is overpaid, the Board can recover the money (collect the overpayment) including by deducting it from any future compensation the worker is supposed to receive. Additionally, all payment or advances issued under Section 48 of the WC Act (lump sum payment of benefits such as temporary total or partial disability (TD), vocational rehabilitation (VR), pension, miscellaneous, etc.) must be collected.
Cost adjustments result from changes made on a claim which impact issued payments (e.g., entitlement decision changes, compensation rate is reduced, return-to-work date). Refer to the Reasons that cost adjustments occur section for additional examples.
When a cost adjustment occurs, there are two potential outcomes:
The overpayment is cancelled as it does not meet the criteria of a collectable overpayment as outlined in policy:
The overpayment is automatically removed when the Cost Adjustment Script is completed. This is called cost correction.
The overpayment is manually removed. This is called cancelled or cost corrected/ forgiven.
The overpayment should be collected or recovered by appropriate means (e.g., future WCB benefits, client payments) as it meets the policy criteria for recovery. This is called a collectable overpayment.
All overpayments are automatically recovered whenever a payment is requested from the same payee, regardless of the claim on which the overpayment was incurred.
Collectable overpayments are classified into two categories:
Debt owing - the overpayment must be collected.
Deferred debt owing - the debt is collectable, but a payment has not yet been obtained in more than 60 days, and the payee has not started to repay the overpayment.
Overpayments will normally be recovered in the following circumstances:
Deliberate misrepresentation.
Duplication of earnings and benefits. Note: Severance pay is not considered employment earnings as per Policy 04-01 - Benefits. Therefore, receiving benefits and severance pay in the same period is not considered duplication of earnings.
Errors that are identified within two weeks of the first excess paymentTo collect an overpayment under this rule, the worker must still be in receipt of compensation benefits at the time the overpayment is declared. The Cost Adjustment Classification Script does not determine if compensation benefits are being paid and will declare the overpayment collectable even if the worker is not receiving benefits. In this circumstance, the overpayment must be manually forgiven..
An accident that was initially accepted was later determined to not be under the jurisdiction of the WCA.
Detailed Business Procedure
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1. Review the cost adjustment and overpayment
Review the claim and determine what caused the cost adjustment (overpayment) and whether it should be cost-corrected/forgiven or collected as a debt owing.
The claim review should include:
File notes with information about the cause of the overpayment - these are commonly categorized as Finance with the standard text of Overpayment or Rate Setting.
File notes for contact with the employer, worker or service provider.
Earnings information.
Alerts related to overpayments.
Changes to entitlement decisions.
Letters communicating decisions or overpayment details.
Investigation reports.
eCO screens including:
Recovery Plan Summary screen - view the "Cause" section to determine why the overpayment occurred, (e.g. Rate Change, DOA change).
Overpayment Inquiry List - look for the total overpayment amount to each selected payee.
The Payment List screen - look for the outstanding overpayment to the worker in the Overpayment Balance field. If required, type in search criteria to review more specific information regarding the payments that created or added to the overpayment to a specified payee.
Notes:
The Cost Adjustment Script is generated when the worker is the payee AND either one of the following:
the compensation rate is changed, causing an overpayment, or
a key date change, causing an overpayment.
To forgive overpayments resulting from changes to non-rate-based payments (e.g. a EX02 payment to the worker was deleted) the CO must action it manually.
When the overpayment is for someone other than the worker, the system does not generate a Cost Adjustment Script. Instead, it creates a Recovery Plan Summary, which by default, treats the overpayment as collectable. These overpayments need to be reviewed to determine whether they should be forgiven or collected.
Cost adjustments for medical aid payments such as prescriptions, or other provider payments such as taxi, translation services and hotel fees paid to the worker may result from manual modification of payments and should be classified as eligible for forgiveness or debt owing/collectable overpayment as per Policy 05-01, Part I - Compensation Overpayments.
Administrative tasks
Add a file note (Finance, Overpayment) outlining the reason the overpayment was created.
Refer to the procedure resource library for the file note template.
For medical provider overpayments an automatic task, (MedAid OVP created by non-MedAid resource) is generated to the Medical Aid team when they involve the following TOP/NOP codes:
HS, PR, MS payments,
VPR01, VPR04 to VPR09, VPR11, and
SSF01 to SSF08, and SSF11 unless the payments are made to the worker.
2. Determine if the cost adjustment is forgivable or a collectable overpayment
If a Cost Adjustment Script was generated, then complete the script by answering the questions based on the circumstances of the claim. Once completed, the system determines if the cost adjustment will automatically be cost corrected/forgiven or classified as a collectable overpayment.
When the cost adjustment is determined to be a collectable overpayment, continue to the next step.
Some cost adjustments like manual payment adjustments (adjustments for medical such as prescriptions or claim expense payments such as taxi and hotel fees paid to the worker) or employer overpayments do not generate a classification script and in these cases, they will automatically appear as a collectable overpayment. These may be manually forgiven if the criteria are met.
If the cost correction decision is approved via script the costs are automatically removed, and no further action is required. End this procedure.
Administrative tasks
Refer to the Payment Unit site on the internal Electronic Workplace for information on completing the script.
If declaring an overpayment for duplication of earnings and the payment of benefits was made by cheque, send a task to the Payment Maintenance, Team Desk indicating the cheque number, payee and amount, to ensure the cheque was cashed prior to pursuing collection of the overpayment.
Refer to library documents: overpayment examples for more information
For a cost adjustment that was automatically cost-corrected by the script, send a file note (Finance) to the supervisor if the amount is over $100, documenting the rationale for the cost correction.
For overpayments that have been manually determined to be eligible for forgiveness, send a file note (Finance, Overpayment Removal) to the supervisor and include:
An explanation of what caused the overpayment (e.g., incorrect earnings reported, claim is not covered under the WCA)
The reason why forgiveness is being recommended (e.g., it was not deliberate misrepresentation), and
Impact of the action taken (the amount involved, next steps, etc.)
The supervisor will review the file note and complete the exception or manually determine the overpayment qualifies for forgiveness and add a file note (Finance, Overpayment).
3. Action the supervisor's approval when they agree to forgive the overpayment
If the cost adjustment is under $100, it can be cost corrected/forgiven by the person who created it without approval from the supervisor.
If the cost adjustment is over $100 it will be sent to the supervisor who will review the task and complete the script questions as follows:
Do you agree this change should have been made?
Do you approve the cost correction classification below?
Was this change a result of deliberate misrepresentation?
Was there a duplication of earnings and WCB benefits?
Did the employer contribute to the error?
If the response to question 1 is yes and 2 is no a “cost adjustment classification changes to OVP” task is sent to the claim owner to correct an input error (e.g. correct a FFW date)
To note: Questions 3, 4 and 5 will not display unless questions 1 and 2 have been answered no. Once all questions are complete a “cost correction classification changes to OVP” task is sent to the claim owner to correct input and/or process as a collectable overpayment.
The Cost Adjustment Script is automatically sent to the next level of approval, if required, and will follow the appropriate levels of authority.
If the overpayment was manually determined to qualify for forgiveness, the supervisor will review the file note and determine if the decision is correct.
The Supervisor will outline if they agree or not in a file note and the decision maker will complete further action.
If the overpayment has been cost corrected/forgiven contact the worker.
If forgiveness has been approved via file note by the supervisor and/or manager, then the decision maker will send a follow-up file note to request removal of the overpayment. For a worker overpayment, include the following details:
Role of the requestor
Amount of the overpayment
The current date
The date of the approval file note and the position of the approver
Administrative tasks
Cost correction approval via script: costs are automatically removed and no further action is required
Send file note (Finance, Overpayment) to the Cost Distribution, Working Desk requesting removal of the overpayment.
4. Communicate the decision to the individual affected by the overpayment if the supervisor agrees to collect the overpayment
Contact the individual affected by the overpayment (whether it is the worker, their dependant, employer or other interested party) and discuss:
How the overpayment occurred, the outstanding balance and the reasons for its collection (refer to Policy 05-01).
That the overpayment will be recovered (i.e., deducted) from any future payments issued to them, including medical aid payments.
The overpayment will be recovered from any claim where benefits are being paid.
Payments options (for the worker only).
For any provider the overpayment will be collected from future submissions.
The recovery plan.
Worker overpayment
If the overpayment occurred because of a deliberate misrepresentation, collect 100% of any future benefits until the overpayment if fully recovered.
If the overpayment occurred because of a duplication of earnings and WCB benefits, and ongoing benefits are being paid, the Recovery Plan Summary in eCO is set to collect a minimum of 25% of the benefit entitlement from each cheque (more if financial hardship is not created by the recovery) until the overpayment is fully repaid).
When determining the recovery amount, ensure it does not create financial hardship. Considerasking the following questions:
What is the worker's current employment status employed full-time, part-time or unemployed)?
If unemployed, how long have they been without a job? Any job prospects?
What is the worker's current gross monthly income (including employment income and WCB benefits)?
Is the spouse/adult interdependant partner employed?
How many dependantsdoes the worker have?
Are there other creditors involved? What are the monthly payments to them?
What are the worker's monthly living costs for basic necessities (e.g., rent, food, utilities)?
When there is an agreement to defer payments because of financial hardship, and the Automatic Payment Recovery Rate is set to 0%, a reminder task will be sent to the claim owner after 30 days if the recovery rate remains at 0%. The worker should be contacted again to determine a repayment plan for the overpayment. Available automatic payment recovery rates are: 2%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 75%, and 100%.
Employer overpayment
The default setting for eCO is to automatically collect 100% of all employer overpayments from ongoing benefits payable to the employers.
This may be adjusted in order to forgive an employer overpayment.
Once the recovery plan has been outlined send the appropriate letter.
Note: Forms & Corr. enabled tasks are added to the claim owner's task list when an overpayment and recovery plan is created, payments are requested for the same payee with an outstanding overpayment (on any claim), or a new claim is established.
A system added reminder task is sent to the claim owner's task list 30 days after the CL104A letter is sent to the worker. Another system-added reminder task is sent to the claim owner's task list 60 days after the IN104A letter is sent, prompting the claim owner to send the claim to Employer Account Services for collection if the overpayment has not been recovered.
Administrative tasks
To adjust the percentage of recovery, refer to the Recovery Plan Summary HELP page for further detail on screen completion.
Help pages can be accessed in eCO and on the internal Electronic Workplace: Business tools > eCO system > eCO Help Pages, then search or use the index to find the Overpayment section.
If there are ongoing TPDTemporary partial disability benefit or ELSEarnings loss supplement benefit payments on any file for the same worker, send a file note (Finance, Overpayment) to the case assistant to have the TPD or ELS payments adjusted to collect the overpayment. If the recovery rate is anything other than the default 25%, include the percentage and reason.
If there are ongoing ELPEconomic loss payment benefit, TELTemporary economic loss benefit, or SSFSelf-sufficiency benefit. These include benefits such as Personal care allowance, Home Maintenance Allowance, Housekeeping Allowance. and an overpayment is created a system generated automatic task, (OVP created for payee with Auto-Payment Skeleton), is generated to the Payment Unit to adjust the skeleton and collect the overpayment. The Payment Unit deducts a minimum of 25% of each payment, (100% in the case of deliberate misrepresentation), until the overpayment is fully recovered.
If an amount other than 25% has been negotiated for ELP, TEL or SSF paymentshas been negotiated, send a file note (Finance, Overpayment), to the Overpayment, Team Desk Payment/Maintenance and provide the appropriate percentage to deduct (e.g., 50%, 75%).
Send the appropriate letter.
For a worker overpayment: CL104A- Overpayment
For an employer overpayment: IN104A- Overpayment
For any other party overpayment: GE104A- Overpayment- recovery plan changed
5. Manage or transfer the file
If ongoing case management is required, continue to manage the file as appropriate and follow up for the overpayment accordingly. Ensure the overpayment is being recovered from any wage loss supplement, pension benefit or skeleton payments.
If no further case management is needed, transfer the claim to a case assistant for ongoing monitoring of the overpayment.
6. Follow up on the recovery of the overpayment
This step is typically completed by the case assistant.
Review the overpayment status at the appropriate interval following the notification letter or claim transfer: 30 days for worker overpayments and 60 days for employer overpayments. Take note if any of the special circumstances outlined in the Action after claim referred for to EAS (Collections) apply to the claim and overpayment.
Payment received
When the worker or employer overpayment has been:
Partially recovered: Review the file note from Finance (if available) detailing the payment received or the OVP Recovery Occurred by Refund task. Send the appropriate letter (Worker - Overpayment Received and Employer - Overpayment update). Set a reminder task to review again in 30 days.
Fully recovered: Review the file note from Finance detailing the payment received or the OVP Recovery Occurred by Refund task. Send the appropriate letter (Worker - Overpayment Received and Employer - Overpayment update). No further action is needed.
Note: Finance only sends a file note when payment is received via payment link. For payments received through claims or other methods, the OVP Recovery Occurred by Refund task is generated.
Payment not received
Worker overpayment: Send the Overpayment Reminder letter. Review the claim again in 30 days, and if payment is still not received, follow the chart below.
Employer overpayments: Review the claim again in 30 days, and if payment is still not received, follow the instructions below the table.
If the overpayment is for the worker, has not been fully recovered (after the second attempt) and is:
Less than $1000
On the Recovery Plan Summary screen, update the Classification field to Deferred Debt Owing.
Document in a file note (Finance, Overpayments) that the debt is less than $1000 so has been reclassified as Deferred Debt and will be recovered from future entitlements.
Greater than or equal to $1000 and was created more than 2 years ago
Ensure the worker was notified of the overpayment in writing.
On the Recovery Plan Summary screen, updated the Classification field to Deferred Debt Owing.
Document in a file note (Finance, Overpayments) that the overpayment was created more than 2 years ago and the worker was notified of the overpayment, so the debt has been reclassified to Deferred Debt Owing and does not get sent to Collections.
Greater than or equal to $1000 and created less than 2 years ago
Ensure the worker was notified of the overpayment in writing.
On the Recovery Plan Summary screen, update the collection status field to Sent to Collections.
Send a file note (Finance, Overpayments > 1000) to the Overpayment Collections, Team Desk, and include the following information:
Outstanding balance
Name and phone number of the contact person (claim owner)
Confirmation that two letters were sent to the worker
Results or details of phone contact
Rationale for the collection decision
If EASEmployer Account Services (Collections) is unsuccessful in recovering the worker overpayment, they will reclassify it as Deferred Debt Owning. The EAS representative will document all recovery attempts in a file note (Finance, Overpayment).
If the overpayment is for the employer and has not been fully recovered (after the second attempt):
On the Recovery Plan Summary screen, update the Collection Status field to Sent to AssessmentSelecting "Sent to Assessment" launches an enabled task..
Launch a file note from the Recovery Plan Sent to Employer Account Services enabled task and document the following information:
Employer Account number and name
Last payment request date
Overpayment amount remaining
Claim number
Worker's name
Copy the file note information into an email and send it to the Employer Account Services mailbox. Refer to the Library/Internal Resources tab or the Employer Account Services site on the internal Electronic Workplace (Departments > Employer Account Services > Send a Referral).
Send the Overpayment Update (IN104B) advising the employer that the overpayment is being added to their premium statement.
Note: The adjudicator, case manager or case assistant remains the contact person if the worker or employer has questions about the overpayment while Employer Account Services (EAS) is working on the claim.
Administrative tasks
Send the appropriate letter.
For a worker overpayment:
Overpayment received (CL104C)
Overpayment Reminder (CL104D)
Overpayment Notice may Collect on New Claim (CL104E)
Overpayment - Collection Initial (CL104G)
Overpayment - Collection No Payment (CL104H)
For an employer overpayment:
Overpayment update (IN104B) advising that the overpayment is being added to their premium statement
Set a reminder task to review the overpayment again in 30 days (worker and employer overpayment).
Note: The overpayment must be recovered or set to Deferred Debt Owing in the Classification field in order to close a claim.
As indicated in the tables, document the outcome of the overpayment repayment in a file note using the appropriate category and standard text and update the Recovery Plan Summary screen.
7. Revisit the existing overpayment when worker has a new claim or further benefits are payable
When one of the following tasks is received, return to step 5 and review for overpayment recovery:
Recovery Plan Returned to Claim task is received. This task is sent when the worker's overpayment is being pursued by EAS and they become entitled to further benefits.
Claimant has OVP on Existing Claims - send F&C task is received. This task is sent when the worker becomes entitled to a payment on any claim in the future (e.g. a new claim is established, a NELP award is requested) and the classification is Deferred Debt Owing. The task is sent to the owner of the new claim. Outstanding worker overpayments are automatically recovered from any new payments issued.
Supporting Information
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Action after claim referred for to EAS (Collections)
Special circumstances:
If the worker submits a payment or is making monthly payments, EAS (Collections) will monitor the overpayment until the debt is fully recovered. The claim owner should monitor the claim for new mail and other updates but is not required to follow up on the overpayment.
If the overpayment is being recovered from a new claim, notify EAS (Collections).
If the worker submits an appeal related to the overpayment (or the issue which resulted in the overpayment) and recovery should be discontinued until the appeal is heard, notify EAS (Collections).
If the overpayment is cost corrected/forgiven, after the claim is referred for collection, notify EAS (Collections).
If a bankruptcy notice is received, send a copy to the claim file and the original to EAS (Collections). They will file a proof of claim, and if necessary, a referral to the Legal Services Department.
If correspondence related to the overpayment is received, notify EAS (Collections).
Document additional information about the special circumstance concerning the overpayment in a file note, if needed.
If collection action is required, EAS (Collections) may register documents with the Court of King's Bench, Land Titles or Registry Office or retain the services of a civil enforcement agency.
Administrative tasks
To notify EAS of the special circumstance, send a file note (Finance) to the Overpayment Collections, Team Desk to advise further action is not required.
Payments on hold
Once all outstanding cost adjustment scripts have been actioned, complete a review to determine if any payments were placed on hold.
The most common reasons that a payment has been placed on hold on a claim include:
Rate Changes: An upward adjustment of rate, adding other earnings or concurrent earnings, changes to the regular days off, the shift cycle, or the calculation shift or payment shift.
Entitlement issues: The claim owner is in the process of making an entitlement decision.
Changing the Payee on the Rate Screen: Changing the payee from a worker to the trustee, employer, etc.
ELP reviews: awaiting a worker response to the ELP 36 letter.
Unknown worker's address: When a worker's address is not correct and has resulted in a payment being returned to the WCB, the payment may be put into hold status until the worker verifies the correct current address.
Supervisors share monthly reports with claim owners that list current payments on hold. Information about payments on hold is also available in eCO file notes and alerts.
Review the payment on hold and decide the next step - whether it should be released or remain on hold. Make sure any related Cost Adjustment scripts are completed so that overpayment recovery can be applied, if needed. If there is an overpayment, return to Step 1 to complete the process.
Administrative tasks
Held payments resulting from a change in employer charging should not be released. They are actioned by the Payment Unit.
Send the Payments on Hold Released (CL015A) letter to the worker if the payment is being released.
Release any held payments through the eCO Hold Payment Summary or Payment List screen.
Note: The Hold Payment Summary screen allows the user to release all payments on hold at once rather than releasing them individually on the Payment List screen.
Reasons that cost adjustments occur on a claim
Cost adjustments can result from changes made on a claim which impact issued payments. These changes can include:
Changing the payeeThis could be changing the payee from worker to trustee, employer, etc. on the rate screen.
Entitlement decision change such as a reconsideration of a previous decision which results in all or part of the claim not being accepted.
Third-party claims where the outcome of a third-party action results in a settlement (i.e., cost recovery) and the worker received an excess payment due to the settlement.
Key-date changes such as changes made to the date of accident (DOA), date of layoff (DOL), date of death (DOD), return to work (RTW), fit to work (FTW), etc.
Rate changes thatcause a downward adjustment of the rate, adding or adjusting other earnings or concurrent earnings, changes to the regular days off, the shift cycle, the calculation shift or payment shift.
Payment changes that require a manual deletion or modification (decreasing) of an issued payment.
Case planning line (CPL) changes to the wage loss supplement (WLS) associated with the CPL.
Reopen entitlement: Entering the subsequent layoff dates in the initial entitlement field, or denial of the initial entitlement layoff instead of the reopen layoff (on the RTW screen).
Repayment options - in-person and online
In-person repayment
Workers can make a payment toward their overpayment in-person at the Edmonton or Calgary WCB office. The following methods of payment are acceptable: cash, cheque, debit, Visa and Visa Debit and/or MasterCard and Debit Mastercard. They will be provided with a receipt for the payment.
If the worker is paying with debit or credit, they must provide valid ID.
The customer counter staff will document the payment in a file note (Finance) indicating the date of the payment and the amount received and send it to the claim owner.
Cheque or online repayment
Workers can make a payment toward their overpayment online. The methods of payment acceptable include: cheque, debit, Visa and/or MasterCard.
Workers can submit a cheque to the Edmonton office using the postage-paid envelope that was included in their letter explaining the overpayment.
Workers can also pay online using a debit or credit card through a payment link using Bambora, the secure third-party service that WCB uses. The worker can contact the Claims Contact Centre (CCC) to obtain the payment link, or the claim owner can ask the CCC representative to send the link to the worker.
Notes:
A payment link will be emailed to the worker and/or employer within one business day. The link will expire in one month, and a new link may be needed if not used in time.
Once the link is successfully sent to the client, the CCC representative adds a file note (Finance, Overpayment link request) and sends it to the claim owner.
Once payment has been received through Bambora, the Finance Department adds a file note (Finance, Overpayment Payment Received) and sends it to the claim owner for review.
Administrative tasks
To request a payment link be sent to a client, send a file note (Finance, Overpayment Link Request) to the CCC OVP Payment, Team Desk. Complete all fields including the repayment amount (partial, full, etc.).
Worker passes away with an overpayment outstanding
If a worker passes away while receiving periodic payments of compensation (e.g. pension or ELP benefits), section 55 of the WCA instructs the Board to pay compensation up to the end of the month of death. If payment beyond that date occurs, a review is required to determine if there was deliberate misrepresentation (e.g. there is no reasonable explanation for why the family or executor did not notify WCB earlier of the worker's death). The overpayment should be collected only if there was deliberate misrepresentation. Otherwise, it meets the criteria for cost correction / forgiveness.
If the worker dies before or during the recovery of an overpayment, contact the executor of the estate to advise of the outstanding debt and arrange for payment. If there are sufficient funds in the estate and the claim has not yet been sent to EAS (Collections), it stays with the claim owner to manage or monitor. This includes sending the appropriate overpayment letters to the estate and waiting for the estate to be finalized.
If there are insufficient funds for recovery, the overpayment will be treated as an uncollectable debt and will be cost corrected / forgiven. If there is no executor determine if the estate assets have been transferred to anyone and contact the Office of the Public Guardian and Trustee (OPGT) to determine if they are involved.
