Frequently Asked Questions – Long Service Levy

There are many assumptions in the industry about the long service levy – this article seeks to clarify some of those matters.

Question 1: 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.

Question 2: 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 prior to the issue of a complying development certificate, construction certificate (for building work) or subdivision works certificate (for subdivision work). The EPA Act relevantly states (with emphasis added):

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.

6.8 Restriction on issue of construction certificate

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

(a) the requirements of the regulations 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.

6.14 Restriction on issue of subdivision works certificate

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

(a) the requirements of the regulations 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, any required long service levy payment must be made before a council or accredited certifier can:

  • issue construction certificates or subdivision works certificates; or
  • forward or deliver complying development certificates

Question 3: Who is liable to pay the long service levy?

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

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

Question 4: What work requires payment of the long service levy?

The type of work that requires payment of the long service levy is broad. The Long Service Levy Act says what work requires payment of the long service levy. It states (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 in section 3 (1).

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.

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. If the situation is complicated you may also require legal advice.

Question 5: 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 (with emphasis added):

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.

Question 6: How much has to be paid?

The current rate payable is 0.35% of the cost of erecting the building.

Question 7: 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. If this occurs it is best to seek legal advice.

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.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s