Superannuation Guarantee and annual leave accrual on workers compensation payments

Nationwide Bookkeeping & Accountants Services

A common question when there is a need to pay workers compensation to employees is “do they accrue annual leave?”

The Association of Accounting Technicians (one of our professional bodies of which we are a Fellow member) have put together this short article.

Workers compensation is an insurance payment payable to an employee if they are injured at work or become ill because of their work. Workers compensation payments and requirements are legislated in each individual state and territory and can also be impacted by the requirements of a Modern Award or other registered agreement.

Important to note is that a workers’ compensation payment is paid to the employee either directly from the insurer, from the insurer via the employer or by the regulator and is not regarded as a wage, rather an insurance payment.

Some Modern Awards and registered agreements require that employees receive an entitlement to superannuation payments whilst they are away from work and in receipt of workers compensation insurance. It is important to check the award or agreement if such provisions apply.

Access to the accrual of both annual and sick leave for an employee receiving workers compensation insurance depends upon the regulations of the individual states and territories. The below is a table summarising the accrual requirements:

State/TerritoryDoes leave accrue?
Annual LeaveSick Leave
NSWYesNo
QLDYesYes
VICYesNo
TASYesNo
WAYesNo
SAUsually, click here for conditions Yes
ACTNoNo
NTNoNo

We hope this becomes a useful resource for you in the future.

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