I lost mine.... for 6 months, i searched high and low, then last friday i found it.... behind the fridge!
Anwoo....They are supposed to send you a letter telling you you can have your license back. And yeah your 'supposed' to hand your license into them.
Of course being a a goverment department, it's run by muppets.
Best bet is to keep you license...put it in a drawer, DON'T DRIVE, then when your time is up go to Vicroads and get the OK.