A newly installed automated system designed to pay out social assistance benefits in Ontario has issued direct deposits and cheques in error.

At least 17,000 payments were generated erroneously in less than a month, totalling $20 million.

The government claims two-thirds of those payments never made it into anyone's bank account. But around $7 million was mistakenly paid out in direct deposit or cheques in the mail.

The government says it was able to stop or retract most of those payments immediately, with minimal impact. "In a limited number of instances where we were not able to retract the incorrect payment, we are working directly with the clients," said a government spokesperson.

The province spent $240 million implementing the new case management software for Ontario Works (OW) and Ontario Disability Support Program (ODSP) workers. It took a total of four years to develop and implement the Social Assistance Management System software. Its first day in operation was on Nov. 12.

Since then it has caused chaos.

Unions, politicians and local officials describe an ordeal that includes mailing out benefits cheques for the wrong amount, staff having to validate cheques by hand and 16 pages of bug fixes in two weeks of operation.

That's on top of an 18-month delay to install the system.

"There was a slight issue of overpayment to a very small proportion, some 17,000 individuals," said Helena Jaczek, the provincial minister of community and social services.

'There was a slight issue of overpayment ...' - Helena Jaczek, minister of community and social services

"When the new system went live, it was generating a full year worth of benefit for individuals who have no entitlement to monetary resources," said Dylan Lineger, who works in the province's disability support office in Ottawa. "So cheques like $9,000 and $10,000."

Of the 17,000 payments, the average amount was $1160.47. "But in most of the cases, it was caught before any money moved," said a government official.

Direct deposits or cheques went to roughly 6,000 people.

"Thousands and thousands of requests for stop payments," said Linegar.

"In terms of a software development implementation, I would say it's abysmal."

Corrections

  • An earlier version of the video included with this story incorrectly used the logo for the Trillium Foundation in place of the Ontario government's trillium logo.
    Nov 29, 2014 5:48 PM ET