Translation:I know, they pay when they can.
There's nothing wrong with "I know they pay when they can." For example, let's say my friend gives a poor family some food every day, and only requests that they pay him for the food on the days on which they have enough money to do so. To acknowledge the family's actions, I would say, "I know they pay when they can."
Yes, kierank2, you've got the meaning of "wenn" about right. My 'rule of thumb' is that you use it where you intend to say "on the occasion that". As for "wann": it won't work here! Only use "wann" to enquire about a point in time. So that's only when you expect a day, date or time as an answer. If you are using "wann" there should be a question mark following pretty closely.
True, but it can also be implied future, depending on context, right? Like: "Was machst du heute Abend?" "Ich sehe (heute Abend) fern." (Meaning I am going to/ will watch TV...) I just interpreted the sentence to be an explanation of why they weren't paying at this precise moment --the answer being that they will, when they can. (Seems a more natural situation to me)
I don't think the relative order of the subject and the verb ever change due to the presence of "wenn". What "wenn" does here, in a subordinate clause, is force the conjugated verb to the end, e.g. "..., wenn sie das machen können". But in the sentence we're discussing, there's only one verb in the clause, so it doesn't change anything.
Perhaps you were confusing this situation with questions starting with "wann"?
http://german.tolearnfree.com/free-german-lessons/free-german-exercise-52552.php So if thats true does that mean this entire lesson is wrong?
Aha! I see what you're saying now. The lesson you linked is correct. Here's the deal:
The clause immediately following "wenn" is the Nebensatz (subordinate clause); in this clause, the conjugated verb is always forced to the end. This is true whether the Nebensatz comes before or after the Hauptsatz (main clause). You can see this by looking at the position of "können" in the two examples below.
If the Hauptsatz comes first, then the Nebensatz has no effect on it. (Ich weiß, sie zahlen, wenn sie können.) But if the Nebensatz comes first, the subject and verb of the Hauptsatz switch places: (Ich weiß, wenn sie können, zahlen sie.)
Because of "ich weiß", this example actually has three clauses, though, and to be honest, I don't really know how to classify all of them properly. However, I think you can just ignore the "ich weiß" clause because the rest would still work the same way without it.