The Long Service Benefits Portability Act 2019 (Act) received Royal Assent on 18 September 2018. Provisions in the Act establishing the Portable Long Service Benefits Authority and its Governing Board were proclaimed to commence from 1 November 2018. The rest of Act, including the obligations relating to registration, provision of quarterly returns, and payment of the levy commence operation on 1 July 2019.
The commencement and operation of the portable benefits scheme will be supported by the introduction of Long Service Benefits Portability Regulations.
The exposure draft Regulations focus on two key issues:
- the coverage of the scheme with respect to the community services sector and
- addressing the potential for ‘double-dipping’ in that sector.
In addition, there are some minor matters addressed relating to the provision of information by employers, and the sharing of information by the Authority with other bodies.
The exposure draft Regulations are accompanied by a Regulatory Impact Statement (RIS) prepared by KPMG. The RIS examines economic and social impacts, costs and benefits of the proposed regulations.
Interested stakeholders are invited to provide detailed feedback on any and all aspects of the exposure draft Regulations.
Please provide your written feedback by completing the survey below or by sending your submission by email to email@example.com
Submissions must be received by 5pm on 31 May, 2019. Emails must be no greater than 25 megabytes in size.
Draft Regulations and Regulatory Impact Statement
Draft Regulations for consideration
Section 27(1) of the Act states that registered active employers must submit a return each quarter to the Authority. Section 27(2) of the Act prescribes the information to be included in the quarterly return. Section 27(2)(c) also allows for further information to be prescribed as required information.
Clause 5 of the exposure draft Regulations prescribes the following additional information with respect to each of the employer’s workers:
- any long service leave granted to, or taken by, the worker; and
- payments for, or in lieu of long service leave made to the worker; and
- any other long service benefits paid or given to the worker; and
- the time at which the benefits were given; and
- the service period to which the benefits relate; and
- for each worker who ceased to be employed by that employer during the quarter, the date they ceased employment.
The additional information will allow the Authority to better manage the employee’s entitlements under the scheme, recognising that the worker may have long service entitlements under other schemes (for example, a federal industrial instrument). Further, if the worker has left the employer’s employment, the Authority will not need to separately contact the employer to seek an explanation as to why that worker is no longer recorded as in service with the employer.
- Is the prescribed additional information appropriate?
- Will employers be in a position to provide this additional information?
Section 51 of the Act allows the Authority to disclose information with specified other Victorian and Commonwealth bodies. It should be noted that this does not impose any obligation on those prescribed bodies to share information with the Authority.
Clause 6 of the exposure draft Regulations prescribes two additional bodies:
- the Australian Tax Office (ATO); and
- the Labour Hire Licensing Authority.
The Authority will be required to deduct tax from any long service benefits paid to a worker. This is common practice for other portable long service benefit schemes (for example, the Building and Construction Industry Portable Long Service Leave Scheme (CoINVEST). For this reason, it is necessary for the Authority to provide information to the ATO to ensure that the correct tax is deducted.
The Labour Hire Licensing Authority is established under the Labour Hire Licensing Act 2018. That Authority is responsible for ensuring that providers of labour hire services obtain a licence, and that host employers use only a licensed provider. The licensing scheme applies across all industries, including the covered industries for the portable benefits scheme. An exchange of information between the Labour Hire Licensing Authority and the Authority will enhance the enforcement of both schemes.
- Are there any specific matters about privacy of information that you wish to raise as part of this proposed regulation?
Part 1 of Schedule 1 of the Act defines what is the “community services sector”, and defines who is an employer, and who is an employee, for that sector.
Under the exposure draft Regulations, certain matters can be prescribed in relation to those definitions.
It is proposed to prescribe the following work as community services work (clause 7):
- social work, welfare work and youth work; and
- home support services for aged persons (other than health or aged care work); and
- on and from 1 January 2020, an activity that is funded by the National Disability Insurance Scheme within the meaning of the National Disability Insurance Scheme Act 2013 (Cth); and
- on and from 1 January 2020 a service provided by a licensed children’s service under the Children’s Services Act 1996 or an approved provider under the Education and Care Services National Law (Victoria) (except an entity that is also a registered school within the meaning of the Education and Training Reform Act 2006).
It is proposed to prescribe the following work not to be community services work:
- an activity that is health or aged care work.
Where a service provides activities that are health or aged care work, as well as activities that are not health or aged care work and are community service work, if the predominant activity is health and aged care work, then the service provided is considered not to be community service work.
It is proposed to prescribe the following persons and classes not to be employers for the community service sector (clause 8):
- an aged care service operated by a hospital; and
- bush nursing centres and bush nursing hospitals specified in Schedules 1 and 2 of the Regulations.
Clause 4(2)(d) of Schedule 1 of the Act provides that individuals employed under certain Commonwealth awards or agreements are not employees for the community services sector.
Clause 9 of the exposure draft Regulations prescribes a number of other awards and agreements. The intention is that a person employed under any of these instruments is not an employee for the community services sector.
In addition, a person employed in an executive or management role is prescribed not to be an employee for the community services sector if:
- the role is wholly administrative; or
- the predominant activity in the role is not the personal delivery of services or the personal performance of activities that are community services work.
Clause 10 of the exposure draft Regulations prescribes how the benefit of an employee is to be calculated, when that employee is leaving the community services sector, or on their death.
- Do the exposure draft Regulations provide clarity as to the scope of the community services sector, what is community service work, and who is an employer, and an employee for the sector?
- Is the list of awards and agreements at clause 9 of the exposure draft Regulations comprehensive? Should any of those awards or agreements be excluded? Should any other awards or agreements be included?
- Whilst it is proposed that the Regulations operate on and from 1 July 2019, the Regulations bringing children’s services, and disability services within the scope of the scheme only operate on and from 1 January 2020. This will enable businesses in those sectors adequate time to prepare for the legislation. Are these appropriate commencement dates?
The Act has a clear intention to prohibit double-dipping. Clause 15 of Schedule 1 of the Act states that where a registered active worker for the community service sector has an entitlement to long service leave or benefits under a fair work instrument, Regulations may be developed setting out the obligations of the Authority, and of the employer, in such circumstances. Clause 15 then sets out certain principles upon which any Regulations are to be based.
Clause 11 of the exposure draft Regulations provide that for the purposes of clause 15 of Schedule 1 of the Act, a registered active worker who is entitled to long service leave under a fair work instrument is not also entitled to a long service benefit under the Act in respect of the same service period, and the Authority is not required to pay a long service benefit. In other words, the worker cannot claim more than one entitlement for the same work. “Entitled” in this context refers to a situation where a worker has reached the minimum period of service under their relevant Fair Work instrument (i.e. seven years, or in some cases, 10 years). The employer of that worker is not required to pay a levy under the Act for that worker in respect of the same service period to which an entitlement to long service leave under a fair work instrument applies. The employer is entitled to seek to recover any levy paid for that worker from the Authority.
- Does the proposed Regulation adequately address any risk of double-dipping?