Will you get superannuation contributions on workers compensation payments?

Under the superannuation guarantee (SG), employers must make superannuation contributions of a percentage of most employees’ ordinary time earnings (OTE). But will you still receive these super contributions if you’re receiving worker’s compensation payments? The answer may vary based on a wide range of factors.

If you are injured at work, you may be entitled to worker’s compensation. This may be paid to you through your employer’s normal payroll, or directly by the insurer that covers your employer for workplace injuries.

If you’re receiving worker’s compensation but are still employed by your employer and have returned to work, then your worker’s compensation payments may be counted as part of your OTE and your employee may be obliged to make SG contributions.

However, if your workplace injuries mean that you haven’t been able to return to work, and/or if you’re no longer employed by your employer, then your worker’s compensation payments may not count as OTE as you aren’t being rewarded for hours worked, so you may not be entitled to SG contributions.

However, according to Fair Work, some awards and registered agreements may give employees an entitlement to superannuation while they’re away from work on workers compensation. This may vary based on the industry in which you work and the state or territory where you work, as different workplace laws may apply.

Keep in mind that superannuation and taxation legislation can be complex and regularly updated by the authorities, so a variety of exceptions and exemptions could apply to both employee and employers. To get the most up to date information, it’s recommended that you contact a licensed financial adviser, accountant, or the Australian Taxation Office (ATO). 

Can you make voluntary contributions to your super from workers compensation?

If you’ve been permanently injured at work, you may be able to make a compensation claim for future loss of earnings, which could be paid as a:

• workers' compensation settlement
• personal injury settlement
• court order made for compensation or damages for personal injury you suffered.

If you choose to voluntarily contribute part of this payment to your super fund, you may be able to exclude all or part of it from your non-concessional contributions cap. This means you will not pay extra tax on the contribution.

You must also:

• make your contribution in the required time limit
• get certification from 2 legally qualified medical practitioners that it is unlikely you can ever work in a job for which you are reasonably qualified
• notify your super provider before or when you make the contribution using the Contributions for personal injury election form (NAT 71162).

Compare super funds