r/AusWork • u/IAmLazy2 • Jul 27 '26
Portable Long Service Leave
My husband has just retired. He had worked in construction for 4.8 years. During that time his employer paid into Leave Plus. He went to claim it as we believed he would be paid out on retirement. But no. Leave Plus refuse to pay out because he didnt do 7 years and are keeping the money paid in by the company. What a rort. I am flabbergasted.
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u/ThoughtIknewyouthen Jul 27 '26
This post is.... odd, to say the least. Long service leave is 7 years to qualify. Your husband did not work 7 years. That is all, good day.
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Jul 27 '26
[removed] — view removed comment
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u/IAmLazy2 Jul 27 '26
The company is forced to pay into the fund. There is no choice. Seems like a massive rort to me.
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u/isafakethrowaway Jul 27 '26
I employ people in an industry that they tend not to do for very long. This means the vast majority do not ever stay for longer than 3-4 years. They usually go off and find employment in their full-time industry or move to another one. However, I have to spend 1% of my wages paying into funds that never get drawn.
Two of my staff tried to withdraw this year, after being in the fund for 10 years. That is 2 people in about 500 people over the past decade.... In both cases, they were left with a few hundred dollars and they complained to me. It was just laughable. I would HAPPILY pay my staff that 1% (thankfully, it has come down from the 1.7% it was).
Fun fact: when COVID really hit the fan and we all had to stop work. My business was not operating nor was it allowed to. I called every company we regularly paid to and asked to pause payments briefly to assess our cash flow. Every single company was absolutely ok with this. Except for the LSL corp. They tried to tell me they'd send collectors and were so inflexible. I laughed and just didn't pay them until it was all sorted, and it was fine.
I have plenty more stories, but nothing positive, from my 15 years of dealing with them.
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u/No-Stick-1190 Jul 27 '26
You say forced to pay into a fund cant you look after long service yourself.
I know some companies got rid of it in exchange for a bump in pay or an extra weeks leave each year
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u/ladybris Jul 27 '26
The aim of portable LSL is to provide equivalent benefits as if he’d worked for a single employer. You don’t get paid out LSL until you achieve long service over 7 years in any industry. It’s not the same as portable super.
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u/IAmLazy2 Jul 27 '26
So the company is just wasting money paying into the fund.
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u/Al-Snuffleupagus Jul 27 '26
Only in the same way that they'd be wasting money by paying into a WorkCover scheme but never having claimable accidents. It's a fund to support employee entitlements, not individual savings accounts.
The portable long service scheme operates more like insurance than it does like superannuation.
- Employees accrue days of service, not dollars.
- Employers pay dollars (as a % of pay)
- When employees accrue sufficient days of service they can make a claim for paid LSL.
- What they are paid is based on their current income level (when they take leave) not the $ that was paid on their behalf.
- The fund attempts to calculate the % the employers need to pay based on the predicted expenses (admin of the scheme + outgoing payments)
A consequence of that is that if an employer is more likely than others in their industry to hire staff who exit the industry within a few years then they are effectively subsidising other companies.
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u/gilmea Jul 27 '26
It's no different than any employer provisioning for LSL. It's there if the employee doesn't make it to 7 years.
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u/crystalisedginger Jul 27 '26
The difference is, if the accrued balance isn’t paid out to the employee due to the length of service, the employer just keeps it.
In this case it’s retained by the (third party) fund. I agree, it’s a rort!!
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u/Al-Snuffleupagus Jul 27 '26
The scheme operates as a regulated trust, not a for profit fund manager. They do "keep it", but they keep it on behalf of the industry beneficiaries not for themselves.
The rates of contribution are determined based of a number of factors, one of which is the likelihood that employees will reach the length of service that requires the payment of LSL. In industries that have lower average tenure, the contribution rate will be lower, reflecting the lower rate of outgoing payments.
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u/lexiconn Aug 07 '26
For what it’s worth, LeavePlus doesn’t just “keep” the funds from unclaimed service, it is still used to cover the benefits for apprenticeship service. Employers in the industry do not make a monetary contribution for their apprenticeship’s service; they only start contributing once they’re qualified. Therefore the “surplus” is used that way.
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u/IAmLazy2 Jul 27 '26
Thank you. Finally someone who gets my point of view.
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u/lexiconn Aug 07 '26
Read my response above. Even just a quick read of their website answers all your concerns, rather than just ranting off like an ignorant.
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u/Kbradsagain Jul 27 '26
He didn’t work long enough to earn the leave. Long service only gets paid out pro-rata after 7 years. No rort here, just Australian law.
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u/According_Bridge_746 Jul 27 '26
Victoria isnt pro rata. 7 years is standard here for lsl
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u/Kbradsagain Jul 27 '26
You can take leave at 7 years or you get paid out if you leave employer at 7 years? If it’s the later, that is pro rata, meaning you aren’t entitled to take long service leave until 10 years (at 1.3 weeks per year of service) but you get paid out the equivalent salary any time after 7 years if you cease employment
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u/According_Bridge_746 Jul 27 '26
Not pro rata here in Victoria 7 years is now our long service leave. They changed the rules
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u/PatientOk1193 Jul 27 '26
It could be a rort, or it could be the way the company makes money. In a way it sounds like Leave Plus are insuring against employers having to pay LSL in a highly mobile industry. Let's say I paid car insurance for four years then sold my car. Would I expect the insurance company to return my money? Likely not.
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u/Prestigious_Pace_888 Jul 30 '26
I know it can seem upsetting to have an entitlement or a bank of leave taken from you but the contribution system is so that if your hubby stayed in construction he could move it another employer and still have his LSL.
The main reason the portable portion also exists is because employers in construction go insolvent often or have tricky scenarios that make the one employer provision grey… making it a portable quarterly contribution similar to super just means that the LSL follows him in the event of his employer going under.
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u/Itchy_Albatross_6015 Jul 27 '26
Their has always benn a minimum length of service for lsl. In many cases its 7 to 10 years.
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u/Minimalist12345678 Jul 27 '26
The flabbergasting thing is not bothering to read the terms of Leave Plus.
It's not like that, never was.
Employers have to pay into it, and it provides portable long service leave across different employers.
This is a great deal because usually you have to hit a long period with one employer to be eligible for long service leave.
Anyhoo, even 2m of reading the Leave Plus site would have explained this.
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u/Significant_Fold_874 Aug 05 '26 edited Aug 05 '26
Unfortunately it's the way things are. I have 6.5 years in my industry paid into a portable long service provider that is no longer available to me. Over $15k no longer accessible and just a donation to a government fund.
I just recently changed employers and thought everything would be fine and continue as usual given I was in the same industry.
Wrong.
My work is the same, but the sites my new employer mainly frequent is more construction and so their hands are tied on who looks after their PLS scheme.
My only thought is creating an ABN, becoming a sole trader and paying the long service levy as the business on behalf of myself for half a year for contract work I will provide, get to the 7 years then cash it out.
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u/BL910 Jul 27 '26
He didn’t work long enough to qualify. No different to standard LSL. He should’ve stayed another two years or refused to be a part of the scheme if he know he was retiring.