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With the new portable long service leave scheme available for community services workers, we have provided a few examples below to assist with the required accounting treatment.

Portable Long Service Leave

With the new portable long service leave scheme available for community services workers, we have provided a few examples below to assist with the required accounting treatment.

As at 31 December 2020, a final provision for long service leave should be calculated for all qualifying workers under the new scheme and recorded in the accounts. From 1 January 2021, no additional provision for the qualifying workers long service leave should be recorded in the accounts. The accrual for long service leave from 1 January 2021, will now be under the portable scheme which will be treated as a payable invoice (to recognise the accrual of the amounts due to the authority, and the payment to the authority). The provision for long service leave calculated as at 31 December 2020 will remain in place until the employee resigns from this employment or has used this entitlement.

Example Scenarios

An employee who is employed at 31 December 2020, and moves employer within the industry at the end of 2021:

  • The employee is a qualifying worker.
  • As at 31 December 2020, the employee accrued 5 years of service.
  • As at 1 January 2021, the employee moves onto the portability scheme.
  • At the end of 2021, with 6 years of service, the employee leaves their position and moves to work for a new employer in the same industry.
  • By moving employer, the employee relinquishes their right to the 5 years’ worth of Long Service Leave that they had accrued before the portablility scheme. This should be removed from the provision calculation as at 31 December 2020.

An employee who is employed at 31 December 2020 , and continues working for the same employer:

  • The employee is a qualifying worker.
  • As at 31 December 2020, the employee accrued 5 years of service.
  • As at 1 January 2021, the employee moves onto the portability scheme.
  • After 31 December 2022, the employee has accumulated a total of 7 years of service (2 years being under the new scheme).
  • The employee decides to take their long service leave – 7 years.
  • The employer will pay the leave relating to 5 years of accrued long service leave, and the remaining 2 years will be paid from the Authority from the levy.
  • The provision for long service leave will remain in place until the employee requests long service leave.

We would also like to highlight that it is your responsibility to determine which of your employees falls under this new scheme and is deemed a qualifying worker. If you need further clarification, we recommend that you seek independent advice from QLeave or from an employment specialist or lawyer etc.

Please do not hesitate to contact our Advisors should you have any questions in regards to the above.

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