Supporting Guidance: employer compliance: guidance by subject: settlement: contract settlements - SAFE: how payments on account are allocated
Payments on account are normally received in advance of a settlement charge being raised. Before the payments can be entered on SAFE a customer account, with a unique SAFE Customer reference, must be created by the Centralised SAFE Team. You should ask the employer/contractor to use this reference when making a payment on account and advise you when they have made a payment, so it is processed correctly.
If a payment on account (POA) is received before a customer account has been requested, you must contact the SAFE Team, see COG915105.
Payments on account are held on the customer’s account and remain there unallocated until a charge is raised. The SAFE Team/nominee can view them by selecting ’View Customer Account’. SAFE is designed so payments on account are only allocated to a charge 30 days before the due date.
Where a charge is raised on receipt of a payment of account and the payment is sent for processing quoting the charge reference, the payment on account will be allocated to that specific charge.
Where a payment on account of an Employer Compliance (EC) settlement is received it will normally remain unallocated in the customer’s SAFE account until the settlement charge has been raised. Other charges can arise without the caseworker’s knowledge. For example, ECS and CIS automated penalties cut across to SAFE and PSA charges raised clerically are collected via SAFE.
SAFE will automatically allocate unallocated payments to the next charge becoming due. This means that in some circumstances SAFE may incorrectly allocate payment on account against other charges.
If at the settlement stage, POAs held on the customer’ account exceed the charge:
where there is another collectible debt complete the
- SAFE Stencil Transfer of payments within SAFE (available in SEES - Corporate Treasury/Miscellaneous Charges Unit (Banking)) to transfer the balance between SAFE accounts
- SAFE Stencil Transfer of payments to other head of duty (available in SEES - Corporate Treasury/Miscellaneous Charges Unit (Banking)) to transfer the balance between other head of duty systems
where there is no other collectible debt, complete the
- SAFE repayment stencil (SAFE 1 new) (available in SEES) to repay the balance.
To prevent payments being incorrectly allocated, all payments on account held in SAFE must be locked, see COG915115.
You will need to routinely monitor unallocated POA on SAFE to make sure they are still available to set against the settlement charge before the charge is raised.