New Report Details Costs of Portable Long Service Scheme
The State’s peak body for community and non-government health services has called for a temporary government rebate to ease the transition to the new Community Services Portable Long Service (PLSL) Scheme.
With the long-awaited Community Services Portable Long Service Leave Scheme formally coming into effect last week, a new report by the South Australian Council of Social Service highlights the costs to community service organisations of the scheme.
The SACOSS report finds that on average, the PLSL levy is more than double the current expenditure on long service leave and would add around 1.2% to the total wage bill for workers covered in the scheme. This means that for every million dollars of payroll for workers in the scheme, community service organisations will need to find around $12,000 to cover the additional costs. For non-profit organisations, that represents a significant impact on their ability to provide vital services.
The report calls for a temporary rebate on the additional costs of the levy. The rebate could be up to 60% of the levy and would be refunded to organisations who register on time and are part of building the scheme from the beginning. The levy would ease the transition to the scheme by covering the additional costs until they can be fully factored into funding arrangements.
The SACOSS report is based on a survey of sector organisations and compares expenditure on long service leave over the last four years with the amount the PLSL levy would have cost for the same payroll. The calculation also takes into account adjustments for superannuation, the definition of income under the PLSL Act, and whether existing funding covers the cost of long service leave entitlements.
The report is available via the SACOSS website.
Key Facts
- The PLSL scheme started on 1 October and requires community sector organisations to pay a levy of 2.2% of the wage of workers under the scheme (around 2% of wages and superannuation)
- Expenditure of community services on LSL entitlements over the last 4 years averaged 0.9% of wages and superannuation
- The total additional costs of the scheme average 1.2% of wages and superannuation
- Around 60% of the PLSL levy represents additional costs to the sector
- The scheme is expected to cover around 20,000 workers in its first year and a full rebate would cost around $17m for the 2025-26 levies.
Quotes attributable to Dr Catherine Earl, SACOSS CEO
SACOSS has long supported the portable long service leave scheme in the interests of worker fairness, recruitment and retention.
If the scheme works as is hoped, then more employees will access leave. This creates additional costs for sector organisations that are already financially stretched with increasing wage and other costs, and increasing demand for services.
Our report quantifies the additional costs of the portable long service scheme, and while the government has said that long service leave is an existing entitlement that should already be factored into funding, the reality is that it is not fully factored in. There will be additional and unfunded costs with this scheme.
In a sector characterised by short-term funding and employment contracts, we welcome sector workers getting better access to much-needed leave, but it can’t come at a cost to the vital services our sector provides – that is why we need a rebate in this year’s mid-year budget review to cover the additional costs until they can be properly incorporated into funding contracts.