Ministry of Education officials have stopped Talent2, the company that runs the school payroll system, from using debt collectors to pursue overpayments to teachers.
The practice prompted an outcry, although the Government says just seven people's debts have been handed to collectors since Novopay started in August.
The Ministry of Education says Talent2 uses the same process for recovering debts as the previous payroll provider, Datacom.
But following complaints it is reviewing Talent2's policy to ensure it is appropriate in the current circumstances.
A spokesperson for the minister responsible for fixing Novopay, Steven Joyce, says Talent2 has now stopped the use of debt collectors.
He says about 200 overpayments from the school payroll are with debt collectors, but only seven of those overpayments were made by Novopay; the remainder are from the previous payroll system.
Those seven debts range from $105 to $3659.
Post Primary Teachers Association national secretary Kevin Bunker says the Government is right to stop debt collectors chasing the overpayments.
Mr Bunker says debts need to be collected, but only when Talent2 is confident Novopay is working correctly.
A spokesman for the primary school staff union, the Educational Institute says the use of debt collectors to chase overpayments made by Novopay has angered teachers.
Ian Leckie says the long-running problems with Novopay have harmed schools' trust in the Ministry of Education and the company that runs the payroll, Talent2.
He says Talent2's use of debt collectors has done further damage to that relationship.
Mr Leckie says using debt collectors is not the right way to work with a trusted professional group like teachers.
