After months of embarrassing headlines and growing frustration among public servants, Ottawa has launched a new initiative to tackle the federal government's troubled pay system.

As first reported by CBC News, the Liberals announced a three-step plan Thursday to alleviate some of the most pressing concerns related to Phoenix, the computerized payroll program for public workers.

Since the Phoenix system was launched in February 2016, tens of thousands of public servants have been underpaid, overpaid, or not paid at all.

The plan includes a two-year, $140-million funding reallocation strategy to help departmental officials get employees paid on time.

Money that had originally been earmarked as savings from the Phoenix program will now be diverted to departmental officials. Those staffers can use the funds to cover pay system related costs, which could include hiring more staff.

While public servants may welcome that news, taxpayers may be less enthusiastic, as this part of the initiative appears to eliminate any savings the Phoenix program was created to deliver, at least for the next two years.

When working as intended, the automated self-serve payroll program is supposed to save the government $70 million per year.

Task force, tax funds

Ralph Goodale, the current public safety minister and the most senior member of the Liberal cabinet, has been tapped to head up a task force to examine Phoenix-related problems.

The working group will include some of the prime minister's most trusted members of cabinet, including Finance Minister Bill Morneau, Treasury Board President Scott Brison, Environment Minister Catherine McKenna, Natural Resources Minister Jim Carr and Steven MacKinnon, the parliamentary secretary for Public Services and Procurement.

The third part of the initiative includes help for public servants who are having trouble filing their taxes.

The government will be offering up to $200 to employees who had to hire an accountant, or incurred fees because of payroll problems relating to their 2016 or 2017 income taxes. Employees must apply for the reimbursement via a claim form on the Treasury Board website.

As many as 50,000 public servant tax slips had to be reissued for 2016 because of Phoenix-related problems.

The Canadian Senate wants to pull out of the federal government's Phoenix Pay system. (Ron Ward/Canadian Press)

More than one-third of the federal public service has experienced a payroll problem since the Phoenix system was launched last year.

The most common issue has been underpayment, with the majority of employees not receiving overtime, pay for acting assignments or certain types of danger pay. But stories of extreme financial hardship have emerged, garnering national attention for months.

The current extent of Phoenix-related problems is unclear. Public Service and Procurement, the department that oversees the program, has stopped publicly declaring the number of employees with pay complications.

Instead, the department refers to the number of "pay transactions" that need to be processed, which makes the situation difficult to understand. A single employee can have multiple pay transactions that need to be dealt with.

As of April 5, 284,000 pay transactions needed to be processed, but there is no clarification of how many people or families that represents.

Blame game

The Liberals have long accused the previous Conservative government of setting the pay modernization program up to fail, by cutting corners on training and eliminating 700 compensation adviser jobs.

The prime minister emphasized that point with colourful language at a town hall meet and greet this past February.

"They laid off everyone who was supposed to help with the transition and left us with a big steaming pile," Justin Trudeau told a public servant, after she confronted him about her pay struggles.

The Conservatives have fired back, saying the Liberals should not have rolled the program out, if they had concerns about the system.