7 Staffing and Entitlements
AASB 119 Employee Benefits sets out the reporting requirements for employee benefits including annual leave.
Provision is made in the accounts for obligations in respect of annual leave entitlements not taken at balance sheet date. The amount is to be accrued annually at remuneration rates expected to apply when the obligation is settled, that is the expected future increase in remuneration rate and comply with the requirements of AASB 119.
Provisions for annual leave should all be reported as current liability.Each year the department provides a model to assist hospitals’ compliance with the standard.
The provision for unused annual leave entitlements.
Annual Leave Model 2012-13
This document is the supporting document for the annual leave provision. Refer to 7.1.1.
From 1 July 2009 Circular 14/2009 will replace Circular 34/2008. The main amendment in Circular 14/2009 relates to the change in the loading contained in the pricing model, increasing by 1% from 1.8% to 2.8%. The 2.8% is to be treated as operating revenue. The difference between this contribution of 2.8% and the hospital’s provision will be met through the creation of a non-cash DHS debtor.
Circular 34/2008 which required the additional funding of 1% to be treated as a reduction of the debtor balance owed by DHS will cease effective 30 June 2009.
Circular 14/2009 also addresses the issue of long service leave liabilities arising from movements of staff members between hospitals covered by the new Circular. Where employees transfer between applicable agencies their entitlements will transfer with them. However the agency from which the employee is transferring is not required to pay the new agency the entitlement that would have been otherwise paid to the employee.
The provision for long service leave is determined in accordance with AASB 119 Employee Benefits. The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits as a current liability. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits as non-current liability and measured as the present value of expected future payments be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates on national Government guaranteed securities with terms to maturity that match, as closely as possible, the estimated future cash outflows.
FRD 17A ‘Long Service Leave Wage Inflation and Discount Rates’ permits agencies to use other wage inflation rates in the calculation of LSL where agencies can clearly demonstrate that for industry-specific reasons, the use of the alternative rates will result in more relevant and reliable LSL calculations. It is currently envisaged that the Department will not provide the industry-specific rates to health services and payroll bureaus as it has done in previous years, and that the DTF defined rate will be applied.
eg. including salary, salary on costs. Awards, training, transport, accom, transfers etc.
Historically, Health Services have individually developed various contractual instruments in an attempt to document all facets of the arrangements relating to the rotation of Doctors in Training. As the subject area is extremely complex, a working group was convened to update the previous draft secondment agreement. The key considerations for the working group of the agreement were:
The draft agreement has specific focus on award entitlements and includes clauses for items including Annual Leave Penalties and Maternity obligations.Doctors in training - Draft Secondment Agreement