In Australia, superannuation guarantee payments are paid to eligible workers by their employer. This money (a percentage of a worker’s wages) is to provide for the worker in their retirement. But what happens to this payment when someone is injured at work and goes on WorkCover (Victoria’s statutory workers’ compensation scheme)? Are they still paid their super?
When can I receive superannuation contributions under WorkCover?
To qualify for superannuation contributions, you must satisfy all of the following:
- you have been injured or suffer a work-related illness on or after 5 April 2010;
- you have received weekly payments for a total of 52 weeks;
- you continue to receive weekly payments;
- you are under the age of retirement; and
- you are not already receiving superannuation from your employer under a public sector superannuation scheme, law or industrial award (e.g. make up pay).
Will I get paid superannuation whilst I am off work recovering from my workplace injury?
The WorkCover insurer (the insurer) is not obligated to pay you superannuation for the first 52 weeks you remain off work due to a workplace injury or illness.
However, if you remain unable to return to work for more than 52 weeks, the insurer will then be obligated to pay your super contributions from this point.
Prior to the 52 weeks anniversary of your workplace injury or illness, the insurer will send you the ‘Choice of Superannuation Fund form’ to confirm the details of your chosen superannuation fund to process future payments.
How much superannuation will I get paid whilst receiving weekly payments?
As of 1 July 2021, the current guaranteed rate of superannuation contribution is 10% of your salary or wages. The insurer will base the superannuation payments on your gross weekly payments. They will pay your superannuation contributions directly to your nominated superannuation fund, in addition to your weekly payments.
Will the insurer keep paying my superannuation when I return to part time work?
If you are below the retirement age and have returned to work part time, you are still entitled to receive weekly payments for your reduced capacity to work.
For example, if you return to 20 hours of paid work per week and your pre-injury work capacity was 40 hours per week, the insurer will pay you weekly payments for the 20 hours you remain unable to work.
You are then entitled to superannuation contributions based on your weekly payments from the insurer (in this example, 10% of 20 hours you were unable to work due to your injury or illness). Your employer should also pay your superannuation contributions for the 20 hours you have worked with them.
Will the insurer continue paying my superannuation when my weekly payments cease?
If you have returned to your pre-injury work and are no longer entitled to weekly payments from the insurer, you will also not be entitled to superannuation contributions from the insurer. Your employer will now be responsible for paying your full super entitlements.
Will the insurer continue paying my superannuation if I’m still incapacitated to return to work after 130 weeks of weekly payments?
If your doctor reports that due to your workplace injuries, you do not have a capacity to return to suitable work and that incapacity is likely to remain for the foreseeable future, the WorkCover insurer will continue paying your weekly payments and superannuation contributions until you either regain a capacity to return to work or you reach retirement age.
Will the insurer continue paying my superannuation if I have a capacity to work part time?
If your doctor certifies that you are able to work for 15 hours or more per week and that limited capacity is likely to continue into the foreseeable future, you can apply for ‘top up’ payments from the insurer.
The insurer will pay superannuation based on the top up payments you receive and your employer will pay superannuation based on the wages you receive for the hours you work each week.
For more information regarding superannuation contributions, please visit the WorkSafe VIC website here.
Can withdrawing from my superannuation impact my entitlement to weekly payments?
If you are still in receipt of weekly payments and looking to withdraw a lump sum from your superannuation before your entitlement to weekly payments has ceased, you should seek professional advice before doing so.
A lump sum withdrawal from your superannuation can be considered as income, by the insurer. If you withdraw a lump sum from your super, this gives the insurer discretion to either reduce or suspend your WorkCover weekly payments. The reduction or suspension period will depend on the amount you have withdrawn from your superannuation.
However, in some circumstances, such as if you withdrew the lump sum due to compassionate or severe financial hardship reasons, the insurer may choose not consider your superannuation withdrawal as income. A withdrawal due to compassionate or financial hardship reasons should not have an impact on your entitlement to ongoing weekly payments form the insurer.
For more information, please visit the WorkSafe VIC website here.
If you are not receiving or no longer entitled to weekly payments under your WorkCover claim, you can withdraw a lump sum from your superannuation balance.
However, it is important to note that the release of any of lump sum from your superannuation balance is likely to have tax implications. You should seek advice from your accountant or financial advisor about the most tax effective way to manage any lump sum withdrawal.