Is superannuation paid on workers compensation?

How does Superannuation work?

Superannuation is a compulsory retirement savings plan in Australia. Employers must contribute at least 11% of an employee’s salary to their superannuation fund. Employees can also make voluntary contributions to their superannuation fund.

Superannuation funds invest the money contributed by employees and employers. The money in superannuation funds can grow over time through investment returns.

Superannuation is generally not accessible until you reach retirement age, which is currently 67 years old. However, there are some exceptions to this rule, such as if you are terminally ill or need to withdraw to purchase a first home.

The Australian government provides a range of tax benefits for Superannuation, such as tax deductions for contributions and tax-free growth of superannuation savings.

How does workers compensation work?

Workers compensation is a government program that provides financial assistance to injured or ill employees. It is designed to help employees cover their medical expenses, lost wages, and other costs associated with their injuries or illnesses.

 To be eligible for workers compensation, your injury or illness must have occurred during employment and was due to the work. The employee is not required to prove that their employer was negligent to be eligible for benefits.

 The amount of workers compensation benefits an employee receives depends on the severity of their injury or illness. In general, employees receive two types of benefits:

• Weekly payments: These payments are intended to replace the employee’s lost wages. The amount of the weekly payments is based on the employee’s pre-injury wage.
• Medical Expenses: These payments are intended to cover the cost of the employee’s medical treatment, including hospitalisation, surgery, and rehabilitation.

In addition to weekly payments and medical expenses, workers compensation may also provide other benefits, such as:

• Lump sum payments: These payments are made to employees with a permanent impairment due to injury or illness.
• Rehabilitation services: These services are designed to help the employee return to work.
• Death benefits: These benefits are paid to the family of an employee killed in a work-related accident.

The State government sets these general regulations for workers compensation. These regulations vary from state to state, but they generally include:

• Employees are required to report their injuries or illnesses to their employer as soon as possible.
• Employers are required to provide their employees with workers compensation insurance.
• Employees are entitled to a fair and impartial hearing if their claim for workers compensation is denied.

Is Superannuation paid on workers compensation?

In general, Superannuation is not payable on workers compensation because workers compensation is designed to replace lost wages and cover medical expenses. Superannuation is not intended to cover these costs.

However, there are exceptions to this rule. Superannuation may be payable if the employee is covered by a modern award or enterprise agreement that specifies that Superannuation is still to be paid while on workers compensation. Most modern awards provide that superannuation must be paid when you are off work on a work-related illness and you remain employed.

You can review if your Modern Award allows for superannuation here.

Are there any exceptions?

Here are some exceptions for when Superannuation is payable on workers compensation:

• Modern awards: Some modern awards specify that superannuation is still to be paid while on workers compensation. You must look at the modern award that applies to you and see if superannuation is payable. For example, the Building and Construction Industry Award 2020 requires employers to pay Superannuation to employees receiving workers compensation payments. 
• Enterprise Agreements: Some enterprise agreements also specify that superannuation is still to be paid while on workers compensation. For example, the Enterprise Agreement for the Retail Industry in New South Wales requires employers to pay superannuation to employees receiving workers compensation payments. 

 Here are some other examples of specific awards and enterprise agreements that require super to be paid while on workers compensation:

• Manufacturing Award
• Hospitality Award
• Cleaning Industry Award 

You can check here to see if your award allows payment of Superannuation.

How to check if you’re eligible to receive superannuation while on workers compensation.

Here are the steps on how to find out if your award or enterprise agreement requires super to be paid while on workers compensation:

1. Check your award agreement: The first step is to check your modern award or enterprise agreement to see if it specifies that superannuation is still to be paid while on workers compensation. You can find your award or agreement on the Fair Work Commission website.
2. Contact your employer: If you are unsure whether your award or agreement requires super to be paid while on workers compensation, you should contact your employer. They should be able to provide you with a copy of your award or agreement or tell you whether superannuation is payable in your case.
3. Contact the workers compensation insurer: If you are still unsure whether you are entitled to superannuation payments while on workers compensation, you should contact the insurer. They will be able to advise you on your entitlements under the law.

Additionally, you can contact your union for assistance if you are a union member. You can also search for information on the websites of the Fair Work Commission and the Australian Taxation Office.

Garling & Co Lawyers Top Tips

• Keep good records: Keep all your medical records, receipts for medical expenses, and any other documentation related to your injury or illness. This will be helpful if you need to dispute your claim or if you need to apply for benefits, such as disability insurance.
• Follow your doctor’s orders: It is best to follow your doctor’s orders to recover as quickly as possible. This may include taking medication, getting physical therapy or resting.
• Report any changes in your condition: If your condition changes, report it to your doctor and lawyer. This will help ensure you receive the appropriate best care possible.
• Ask questions: If you have any questions about your workers compensation claim, ask your doctor, IRO, or a lawyer.
• Be patient: The workers compensation process can be slow and frustrating. Be patient and persistent, and don’t give up.

Thank you for reading our article. We hope it helped your understanding of Superannuation and Workers Compensation. Should you have any further questions, please contact our office at (02) 8329 9500 or complete a free case assessment here.