How will workers compensation payments change my leave, tax, and super?

If you are paid workers compensation, this can often come in the form of weekly payments while you are unable to work.

Our team get questions about the impact these payments may have on your leave, tax, and superannuation. We’ve broken it down below so you can understand the impact on these payments if you are paid compensation.

Annual leave

From 10 June 2023 amendments to the ACT workers compensation legislation mean that injured workers can accrue and take annual leave and long service leave while they are receiving incapacity payments. The amount of leave that you accrue will depend on the hours and conditions you were working prior to being injured.

Tax

Injured workers receiving weekly compensation payments do have to pay tax.

There is no guarantee that tax is withheld from your payments, so be sure to ask your employer or insurer whether you need to put aside money yourself to cover tax charges at the end of the financial year.

Superannuation

The recent legislation changes did not change superannuation arrangements.

Superannuation is not payable for any period that an injured worker is not working.

What if I need to work reduced hours?

If you return to work but on reduced hours, you might be getting paid a combination of wages and weekly compensation payments. In this case, your leave and superannuation will only be based on the number of paid hours of work you actually did, you will not accrue leave or receive superannuation for hours not worked but covered by your workers compensation payments.

Considering a workers compensation claim? You deserve better, and the MEJ is ready to help. Don’t delay, contact MEJ today.