When is a Long Service Levy payable?

There is an assumption in the industry that a long service levy is always payable before a construction certificate is issued. Is this true?

The answer is no.

A long service levy only needs to be paid if it is payable for the particular type of work proposed. There are also exemptions in certain situations. If you are unsure, it is best to speak with your council, accredited certifier, or the Long Service Corporation.


What is the long service levy?

The long service levy is a levy paid into a fund administered by the Long Service Corporation. The Long Service Corporation then uses this fund to make long service payments to building and construction workers.


When is the long service levy payable?

The Building and Construction Industry Long Service Payments Act 1986 (Long Service Levy Act) relevantly states:

36   Date long service levy becomes payable

A long service levy in respect of the erection of a building is due and payable before work is commenced on the erection of the building.

There are mechanisms in place in the Environmental Planning and Assessment Act 1979 (EPA Act) to ensure payment is made. The EPA Act relevantly states:

4.28   Process for obtaining complying development certificates

(10A) Payment of long service levy

Where a council or accredited certifier completes a complying development certificate, that certificate is not to be forwarded or delivered to the applicant, unless any long service levy payable under section 34 of the Building and Construction Industry Long Service Payments Act 1986 (or, where such a levy is payable by instalments, the first instalment of the levy) has been paid.

109F Restriction on issue of construction certificates

(1) A construction certificate must not be issued with respect to the plans and specifications for any building work or subdivision work unless:

(a) the requirements of the regulations referred to in section 81A (5) have been complied with, and

(b) any long service levy payable under section 34 of the Building and Construction Industry Long Service Payments Act 1986 (or, where such a levy is payable by instalments, the first instalment of the levy) has been paid.

Accordingly, councils or accredited certifiers are unable to issue construction certificates, or forward or deliver complying development certificates, unless any required long service levy has been paid.


Who is liable to pay the long service levy?

The Long Service Levy Act specifies who is liable to pay the long service levy. It says:

37   Person liable to pay long service levy

(1)  A long service levy in respect of the erection of a building is payable by:

(a)  in a case where development consent, a construction certificate or a complying development certificate is required to be obtained under the Environmental Planning and Assessment Act 1979 for the erection of the building:

(i)  if development consent is granted and a construction certificate is not required to be obtained—the person to whom the development consent is granted, or

(ii)  if a construction certificate is required to be obtained—the person to whom the construction certificate is issued, or

(iii)  if a complying development certificate is issued—the person to whom the complying development certificate is issued, or

(b)  in any other case—the person for whom the building is being erected.

In most instances the person liable to pay will be the applicant for the development consent, construction certificate, or complying development certificate.


What work requires payment of the long service levy?

The Long Service Levy Act says what types of work require payment of the long service levy. It says (with emphasis added):

3   Definitions


building and construction industry means the industry of carrying out the construction, reconstruction, renovation, alteration, demolition or maintenance or repairs of or to any of the following:

(a)  buildings,
(b)  swimming pools,
(c)  fences,
(d)  roadworks, railways, airfields or other works for the carriage of persons, animals or vehicles,
(e)  breakwaters, docks, jetties, piers, wharves or works for the improvement or alteration of any harbour, river or watercourse for the purpose of navigation,
(f)  works for the storage or supply of water or for the irrigation of land,
(g)  works for the conveyance, treatment or disposal of sewage or of the effluent from any premises,
(h)  bridges, viaducts, aqueducts or tunnels,
(i)  chimney stacks, cooling towers, drilling rigs, gas holders or silos,
(j)  pipelines,
(k)  structures, fixtures or works for use in or in conjunction with any building or other works referred to in paragraphs (a) to (j) inclusive,
(l)  navigational lights, beacons or markers,
(m)  works for the drainage of land,
(n)  works for the storage of liquids, other than water, or of gases,
(o)  works for the transmission of electric power,
(p)  works for the transmission of wireless or telegraphic communications,

and includes pile driving and the preparation of the site for any building or other works referred to in paragraphs (a) to (p) inclusive.

33   Definitions

(1)  In this Part…

building has the same meaning as it has in the Local Government Act 1993, and includes any structure or work referred to in paragraphs (a)–(j) and (l)–(p) of the definition of building and construction industry

erection, in relation to a building, has the same meaning as it has in the Local Government Act 1993.

34 Buildings in respect of which long service levy payable

(1) A long service levy is payable in respect of the erection of every building, except as provided by this section.

Relevant definitions under the Local Government Act 1993 include:


building 
includes part of a building and any structure or part of a structure, but does not include a moveable dwelling or associated structure or part of a moveable dwelling or associated structure.

erection, in relation to building, includes any structural work and any alteration, addition or rebuilding.

The type of work that requires payment of the long service levy is broad. If you are unsure whether the long service levy is required to be paid in your specific situation, it is best to speak with your council, accredited certifier, or the Long Service Corporation.


When is the long service levy not payable?

The long service levy is not payable where there is no proposal to “erect a building” as understood under the Long Service Levy Act.

The Long Service Levy Act also provides for exemptions where the long service levy is not payable:

34 Buildings in respect of which long service levy payable

(2) A long service levy is not payable:

(a) (Repealed)

(b) in respect of the erection of a building if a long service levy has already been paid in respect of the erection of that building or of other buildings of which that building forms part, or

(c) in the circumstances and to the extent prescribed by the regulations.

There are a range of exemptions for when payment is not required in the regulations. You can access the exemptions by clicking here


How much has to be paid?

The current rate of the long service levy is 0.35% of the cost of erecting the building.


What happens if payment isn’t made?

There are penalties and fines that can be imposed if payment of the long service levy is not made. There may also be difficulties in obtaining the relevant certificates required to allow a development to lawfully proceed.

Posted by

Alyce is a civil engineer and a practicing lawyer, who has a desire to share her insights on the legal and practical realities of the development industry.

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