04/17/2015 10:09 EDT | Updated 07/03/2015 05:59 EDT

Former banker will guide Newfoundland and Labrador pensioners in payback

ST. JOHN'S, N.L. - Many cash-strapped retirees were already getting reduced cheques as Newfoundland and Labrador appointed a former banker to help recoup public pension overpayments of almost $1 million.

Finance Minister Ross Wiseman on Friday announced Leo Bonnell, head of the provincial advisory council on aging and seniors, will handle what Wiseman called a "delicate" situation.

No budget or timeline has been confirmed, but Bonnell will consult one-on-one with aging pensioners who owe amounts ranging from less than $300 to more than $30,000.

There's a duty to at least try to get that money back, Wiseman said in an interview. It's owed to provincial public sector and teachers' pensions — not the government, he explained.

An audit dating back 20 years found that provincial payments weren't properly adjusted when Canada Pension Plan benefits started as retirees turned 65. As a result, about 427 people were overpaid a total of $935,000 through no fault of their own, Wiseman said.

Statutes of limitation mean the government can only collect going back 10 years, he confirmed.

Retirees on fixed incomes now receiving lower, corrected cheques are also grappling with the notion that they owe more.

Wiseman said close to 300 of them owe less than $500, but about 60 are on the hook for $3,000 or more.

"Some of this money will never be repaid," he said. "We acknowledge that.

"Using formulas won't work. We need to talk to each of those individuals, and their unique circumstance will reflect what they can afford."

Bonnell said he'd already had calls Friday from anxious pensioners within hours of the announcement.

"Obviously government is in a very difficult position but also people that are on the receiving end," he said in an interview.

"It's a really unfortunate situation that has happened and I really don't have the answers yet as to how this can be addressed."

Ralph Morris, past president of the Newfoundland and Labrador Public Sector Pensioners' Association, said confusion and conflicting information have taken a huge toll.

"They're frightened to death," he said of retirees who've spent years on fixed incomes that have dwindled over time. "They're afraid they're going to lose homes. They're afraid they're going to be put out of nursing homes."

Morris said an 88-year-old woman in long-term care who receives $135 in pension income for incidentals each month has been asked to repay $134 every two weeks.

"According to the payment structure they've given her, she wouldn't be finished until she's 103 years old."

Morris and other advocates are to meet Tuesday with Wiseman.

While some retirees can afford to settle their account, Morris said he's concerned not enough thought was given to those who can't before letters seeking repayment went out. He described one case involving almost $53,000.

"It seems it's a draconian measure that they took not thinking of the consequences of it."

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