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Commonwealth legislation
What these Rules do, in plain language
Mechanics — what changes and how it works
Notional accounts: The Corporation must create a notional account for each person who becomes an eligible employee after these Rules start, but it only has to create an account if it is aware the person is an eligible employee (Rule 5(1)–(2)). Notional accounts already created before these Rules are treated as created under these Rules (Rule 5(3)).
Recording levy payments: Each month the Corporation must record in an eligible employee’s notional account the amount an employer actually paid as levy under the Payroll Levy Collection Act for that employee (Rule 6).
Corrections: The Corporation may correct notional accounts if it determines details are incorrect and must record the reasons for any correction (Rule 7).
Deciding reimbursement claims: If an employer claims reimbursement under section 44 of the Act after these Rules commence, the Board must calculate the reimbursable amount using the formulas in these Rules (Rule 8(1)). The Board does not have to separate any parts of a claim that relate to pre‑2012 and post‑2012 entitlements (Rule 8(2)).
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Direct links to the current provisions in Employer Reimbursement Rules 2017.
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View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Formula for reimbursement to an employer who paid an eligible employee: The reimbursable amount equals the hours of long service leave paid by the employer (subject to the hours recorded in the Corporation’s records and excluding hours already reimbursed) multiplied by the employee’s eligible wages amount per hour (Rule 9(1)). The eligible wages amount per hour is taken from immediately before the employee began the leave (if still employed) or immediately before they left employment (if not employed at payment time) (Rule 9(1)(a)–(b)). If that formula produces a figure higher than the amount actually paid to the employee, the reimbursable amount is limited to the amount actually paid (Rule 9(2)).
Payments to legal personal representatives: If an employer paid the employee’s legal personal representative (under section 39C or 39CC of the Act), the reimbursable amount is worked out the same way as if the payment had been made to the eligible employee (Rule 10).
Who pays, who decides, and what this makes people do
Who pays: Employers pay levies under the Payroll Levy Collection Act (Rule 6 refers to levy amounts). Employers may also make payments of long service leave to employees or to legal personal representatives and then claim reimbursement under Part 5A of the Act (Rules 8–10).
Who decides: The Corporation maintains notional accounts and may correct them (Rules 5–7). The Board determines the reimbursable amount for employer claims using the Rules’ formulas (Rule 8(1)).
Behavioural effects supported by the text: Because reimbursements are capped by hours and by the amount actually paid, employers have an operational reason to ensure their levy payments and employee payments are properly recorded so that notional accounts reflect the hours eligible for reimbursement (Rules 6 and 9). The Corporation’s rule that it only creates an account if it is aware an employee is eligible (Rule 5(2)) makes the Corporation’s awareness a necessary step for an employer to rely on recorded entitlements.
Implementation, compliance and decision-discretion points (text-cited)
Record-keeping and administrative tasks: The Corporation must record levy amounts monthly in notional accounts (Rule 6) and must keep reasons for any corrections it makes to those accounts (Rule 7). Employers who wish to claim reimbursement must rely on those recorded amounts when the Board applies the formula (Rules 6, 8–9).
Discretion and potential gaps: The Corporation has discretion not to create a notional account unless it is aware the person is an eligible employee (Rule 5(2)). The Corporation also has discretion to correct accounts when it determines they are incorrect, subject to recording its reasons (Rule 7). The Board, when deciding a claim, must apply the formula in these Rules and is not required to separate claim parts into pre‑2012 and post‑2012 entitlements (Rule 8(2)).
Costs, incentives and trade-offs (mechanisms, not judgments)
Concentrated benefit: An employer who pays eligible long service leave and whose payments match recorded hours and wages can recover amounts under the formulas in these Rules (Rules 8–10). The immediate benefit accrues to employers who meet the recording and payment conditions set out.
Administrative cost and compliance burden: The Corporation must maintain monthly records in notional accounts and document any corrections (Rules 6–7). Employers must ensure their payments and levy records align with the Corporation’s records to support claims (Rules 6, 9).
Payment caps and limits: Reimbursements are limited by (a) the hours recorded in the Corporation’s notional account immediately before payment and excluding previously reimbursed hours, and (b) the actual amount paid to the employee if that is less than the formula amount (Rule 9(1)–(2)). These are mechanical limits embedded in the calculation.
Key sections cited: Rules 2–3, 5–7, 8–10.