Many people fail to understand their entitlement to workers compensation benefits until they suffer the misfortune of a workplace injury and become reliant on these payments for necessary expenses. Even then, many don’t fully understand what they are legally entitled to and fail to consider other payments such as regular superannuation contributions.
In NSW, injured workers who are on workers compensation payments and are completely unable to work do not receive superannuation contributions throughout this period.
Basics of Superannuation & Workers Compensation
Understanding Superannuation Payments
Under the Superannuation Guarantee (Administration) Act 1992, and the Fair Work Act 2009, every worker is entitled to a percentage of Superannuation on top of their wages, payable by their employer to their superannuation fund. In Australia, your employer pays 10.5% or more of your salary into a super account, which is invested for you until you retire.
Understanding Workers Compensation Payments
Workers’ compensation is a form of insurance payment to employees (usually they will receive weekly payments) if they are injured at work or suffer a work-related illness. Workers’ compensation benefits include payments made to injured persons to cover their:
-wages while they’re injured and not fit for work
-medical expenses and rehabilitation
Is Superannuation Paid on Workers Compensation?
Weekly wage payments made to an employee on Workers Compensation are not treated the same as a wage from an employer. As such, employers are not required to pay super whilst employees are on workers compensation claims in NSW. There are some exceptions to this, including:
- If the modern award an employee is covered under states that super is to be paid; or
- If the employee falls under an enterprise agreement which specifies super is still to be paid whilst on workers compensation
Additionally, if a worker has a partial capacity to work, and is being paid by the employer for these hours, these will be considered as ordinary time earnings and accordingly, super will be payable on this amount.
Does Work Cover Calculations Include Superannuation?
In short, no. Whilst other states’ WorkCover calculations may include superannuation payments, in NSW the Superannuation Guarantee Ruling says that if you are paid workers compensation payments and you haven’t returned to work, then the payment being made to you is not ‘salary or wages’. This is because the payment being made to you is not a reward for your services to your employer. It is a payment being made to you because you can’t work due to injury or illness.
As the ATO doesn’t define your workers compensation payment as ‘salary or wages’, there is no requirement for your employer to pay your super if you are not working and you are receiving workers compensation payments.
If you have returned to work and you are performing suitable duties, then your employer should continue paying your super guarantee for the hours that you are at work. However, you aren’t entitled to receive the super guarantee for any top up payments being made to you by the workers compensation insurer.
However, if you are on a modern award of an individual workplace agreement, your contract may stipulate that you are entitled to your superannuation by your employer whilst you are on workers compensation.
How Long Can You Stay on Workers Compensation in Australia?
In NSW, unless your level of impairment from your injury or illness has been assessed as greater than 20%, Workers Compensation payments will cease after 5 years. This is in accordance with section 39 of the Workers Compensation Act 1987, which states weekly payments are available for a maximum period of 260 weeks.
If an individual has suffered a workplace injury assessed as greater than 20% whole person impairment, they are technically eligible to receive workers compensation payments until retirement age; subject to their capacity to work. Those workers known as “exempt workers” (such as an emergency service worker, coal miner or volunteer) are also not subject to this maximum period of 5 years.
Need Help with a Workers Compensation Claim? Contact BurkeMead Lawyers Today
If you have suffered a workplace injury or illness and wish to make a claim for workers compensation, we highly recommend you contact an experienced legal professional. The team and Burke Mead lawyers can provide you invaluable guidance and support to ensure you receive the most favourable outcome in your matter.
Contact Burke Mead Lawyers today to discuss your Workers Compensation claim!
About the Author
Sean is a member of the personal injury team with extensive experience in representing injured clients at the Personal Injury Commission as well as in the District and Supreme Courts of NSW.