Tax & Insurance

Is Superannuation Paid on Workers Compensation?

  • Troy BurnsTroy Burns
  • Mate Checked

    This information has been reviewed by our SMSF Mates before it was published as part of our review process.

Superannuation and workers compensation are two integral components of the Australian employment landscape. While they may seem like different worlds, their paths often intersect in ways we might not initially consider.

In essence, workers compensation serves as a financial buffer for employees who face injury or illness in the workplace, providing a system where employees can receive weekly payments to help them through tough times. Superannuation, in contrast, is a compulsory retirement savings plan, ensuring financial stability in your post-working years.

Superannuation payments generally do not continue during periods of workers compensation. However, exceptions may apply depending on factors such as the employee’s return to work, the applicable modern award, enterprise agreements, and industry-specific rules.

Understanding Workers Compensation Payments

At the core of employment safety measures is workers compensation, a provision intended to financially shield those who, due to unfortunate circumstances, are recovering from a workplace-related injury or illness. The calculation of these payments is often based on the gross weekly payments you were receiving prior to your injury. This provision, acting as an essential buffer, can cover up to 95% of lost wages, facilitating the reimbursement of treatment and rehabilitation costs.

The specifics and amount of compensation, however, are far from uniform. They can vary significantly based on the respective regulations of each state or territory. Rather than being classified as wages, a workers compensation claim is typically considered an insurance disbursement. These payments are usually managed in one of three ways: they may be directly provided by the insurer, channelled through the employer by the insurer, or administered by the workers compensation regulator.

Grasping Superannuation Contributions

Superannuation is not merely a financial safety net for the future. It is an active, forward-thinking financial plan, tailored to support your lifestyle after retirement. Thus, grasping the implications of filling out your superannuation fund form is crucial.

In most cases, your employer is responsible for making contributions to your superannuation. These super contributions, along with any top up payments, are portions of your income set aside and nurtured for growth, forming a financial buffer for your retirement years.

Under the Australian Tax Office (ATO) guidelines, as we crossed into July 2022, the Superannuation Guarantee (SG) – the mandatory payment from employers into their employees’ superannuation accounts – is fixed at 10.5% of the workers’ earnings. A planned yearly increment of 0.5% is set, aiming for a culmination at 12% in 2025.

However, when an injured worker is receiving workers compensation payments, the situation can introduce additional complexities. In the subsequent section, we will scrutinise the interplay between potential entitlement to superannuation and workers compensation.

Superannuation and Workers Compensation: A Complex Relationship

The relationship between superannuation and workers compensation is not so black and white. For instance, those on the public sector superannuation scheme may have different implications compared to private sector employees. Superannuation contributions are usually tied to an employee’s ordinary earnings (OTE). Yet, workers compensation isn’t classified as OTE, sparking the belief that superannuation halts during these periods.

It’s important to remember that there’s no universal rule and exceptions do occur. Superannuation might continue during workers compensation if an individual resumes work in some capacity. In this scenario, superannuation applies to the earned remuneration.

Certain Modern Awards or enterprise agreements may mandate superannuation payments during workers compensation periods. This highlights the importance of closely examining the provisions of an employee’s particular employment arrangement.

Certain industries demonstrate exceptions to the general rule. For example, the building and construction industry is one such sector that typically allows workers to receive superannuation contributions even while on workers compensation.

Worth noting is that the majority of policies or awards that do provide for superannuation contributions alongside workers compensation cease these contributions after 52 weeks of workers compensation payments.

The relationship between superannuation and workers’ compensation highlights the need for comprehensive research. Seeking professional advice becomes crucial in understanding your specific circumstances, especially as you approach your retirement age.

Workers Compensation and Other Employee Entitlements

Whilst dealing with a workplace injury or illness and the corresponding workers compensation, it’s vital to be aware of the array of employee entitlements that could potentially come into play. While workers compensation can provide substantial support in such times, it doesn’t typically extend to the allocation of public holidays.

However, employees may have access to other forms of leave during their compensation period. This could include the accrual or utilisation of annual leave, personal leave, and even long service leave under certain conditions. Each type of leave comes with its own set of guidelines and eligibility criteria that need to be thoroughly understood to optimise their benefits.

One more notable provision is the option for unpaid parental leave. Eligible employees on workers compensation can opt for this, further expanding the range of entitlements during this period.

Factors Influencing Superannuation Entitlements during Workers Compensation

The continuation of superannuation contributions while an employee is on workers compensation isn’t a straightforward process. Rather, it’s influenced by a multitude of factors that can modify its applicability. One such element includes the specifics of the employee’s Modern Award or enterprise agreement.

Each Modern Award or enterprise agreement comes with its own set of provisions and guidelines. Depending on the individual’s employment arrangement, they might be eligible to receive superannuation payments even while on workers compensation. For instance, certain Modern Awards or enterprise agreements mandate the continuation of superannuation contributions during this period, ensuring the retirement savings of the employee aren’t completely halted.

Furthermore, the contractual agreement between the employee and employer also plays a significant role. Some contracts may outline terms for superannuation during workers compensation, ensuring their retirement nest egg continues to grow despite their workplace injury or illness.

Need for Legal Consultation

Gaining clarity on your workers compensation and superannuation entitlements is key to navigating your situation effectively. If you find yourself uncertain about your entitlements while on workers compensation, seeking guidance from experienced workers compensation lawyers can provide valuable insights.

These legal professionals possess comprehensive knowledge of the intricacies surrounding different Modern Awards, enterprise agreements, and other legal provisions related to workers compensation and superannuation. They can help ensure you have a clear understanding of your entitlements and assist you in making informed decisions about your financial future.

For those who are used to regular income schedules, such as receiving weekly payments, understanding the nuances of how workers compensation and superannuation entitlements interact is particularly crucial for financial planning.


The intersection between workers compensation and superannuation can seem daunting, yet understanding it is paramount for optimising benefits and preserving your future financial security. In general, workers compensation, while crucial for those recovering from workplace injuries, does not ordinarily extend to superannuation contributions. However, exceptions exist depending on factors such as the terms of Modern Awards or enterprise agreements, and individual employment contracts.

Access to other entitlements, like different types of leave, may also be available during a workers compensation period. Therefore, in the face of any uncertainty, it’s advisable to seek guidance from experienced legal professionals or consult trustworthy online resources, such as the Fair Work Commission’s website.

General Advice Warning

Troy Burns

Non-Correlated Capital

Troy has more than 15 years investment and fund management experience, including management of hedge funds and multi-strategy funds. Troy has raised and managed over 300 million dollars in investments and has engaged and serviced over 150 high-net-worth clients for Non-Correlated Capital, the investment company which he serves as CEO and Portfolio Manager. Based out of Perth, Western Australia, Troy is one of the founders of SMSF Mate.

Troy’s educational qualifications include a Masters of Business Administration, Masters of Applied Finance, and Advanced Diploma, Financial Markets, completed at Charles Sturt University. Troy has also previously worked as a derivatives trader and the managing director of a civil engineering company.

You can find out more about Troy or connect with him on Linkedin here:

Or visit his website here:

Show More

Kind words from Aussies managing
their own self funded futures

  • SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!

    David G, Self-Employed, SMSF Owner
  • SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.

    Tim B, Business Owner, SMSF Trustee