Offsetting Arrangement of Long Service Payment ("LSP") and Severance Payment ("SP")

As an employer, if you are planning to offset the Long Service Payment or Severance Payment paid to your employees with the MPF accrued benefits derived from the employer's contribution, please note the following:

Under the Employment Ordinance, some employees may be entitled to Long Service Payment or Severance Payment. According to the MPF legislation, an employer can offset the Long Service Payment or Severance Payment paid to an employee with the MPF vested benefits derived from the employer's contribution made to an MPF scheme for that employee.

The offsetting sequence is:

1. Vested balance of employer voluntary contributions (if any)
2. Employer mandatory contributions

• Employers should communicate with their employees if they have revised the Agreement in relation to the Long Service Payment or Severance Payment offsetting arrangement.
• Employers should communicate their intention to their employees with regard to Long Service Payment or Severance Payment claim before applying the offsetting agreement.

How to File Offsetting Agreement

Step 1

Complete Claim Form

Mark "Long Service Payment /Severance Payment Claim" and indicate the Long Service Payment / Severance Payment amount in the relevant columns on the remittance statement or the Employee Termination Notice

Step 2

Submission

Submit the original Long Service Payment / Severance Payment receipt duly signed by you and your employee