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Maintain Recovery of Arrears

In this step you can set up another arrears recovery method which links arrears wage types to a balance via a recovery wage type.

This alternative recovery from arrears excludes the relevant wage type from arrears processing. It may be used if a payment plan has been set up consisting of

and

The arrears wage type, which has to be excluded, is linked to a recovery wage type. This recovery wage type is connected with a balance wage type. This balance is reduced via the corresponding regular installments (deduction).

Recovery from arrears starts when an Additional Payments (infotype 0015) record is created containing the recovery wage type. The amount to be recovered is sent to the appropriate balance wage type. The regular installments (deduction) entered in infotype 0014 reduce the balance amount during payroll. This is handled in the same way as a regular deduction processing with balances.

Example

An employee has an outstanding arrears amount of $1500.00. For $1000.00 of this sum you have set up a special payment plan. You wish to deduct this amount of $1000.00 during the next ten payroll periods, $100.00 within each period.

You would enter the recovery wage type with an amount of $1000.00 in infotype 0015. Date of origin would be a day of the period when recovery should start.

You would enter the deduction wage type with an amount of $100.00 in infotype 0014. You would choose the appropriate pay model for a deduction in each period.

During recovery processing of the first payroll period the balance wage type of $1000.00 would be created. This would then be decreased during the next ten payroll periods, with a deduction amount of $100.00 in each period.

Requirements

You should ensure that the arrears wage type linked to is still available when deduction processing starts and that the wage types to be linked together via the indicators are NOT identical.

For further details concerning deduction and balances processing please refer to Wage types for deduction with balances and totals .

Standard Settings

The standard SAP R/3 System contains sample entries which you may copy.

Activities

1. Maintain the links between the four wage types:
indicator
Arrears deduction 12 Recovery wage type
Recovery wage type 13 Balance wage type
Regular deduction 10 Balance wage type
Use the same balance wage type for the two entries.
2. Please set up the processing classes below as follows:

Recovery wage types:

Processing class 05: Storing without split indicator in RT
Processing class 20: Summarized references

Balance wage types:

Processing class 05: Storing without split indicator in RT
Processing class 06: Wage type accepted from preceeding acc.
Processing class 20: Summarized references
Processing class 50: Wage type is processed as balance