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Work injury damages (part 5)
The current rate of compulsory superannuation is 9% on gross loss or 11% on net loss.
In any claim for Work Injury Damages you can include in the calculation of damages your loss of compulsory superannuation payments due to your inability to work.
You must be able to establish that but for the injury you would have been paid compulsory superannuation benefits by your employer. This is due to increase in the future in accordance with Federal Government legislation.
Your lawyer should make sure the proper amount of superannuation is claimed in any Work Injury Damages claim.
Superannuation
The approach to payment of superannuation in Work Injury Damages claims was looked at in the case of Najdovski v Crnojlovic 2008 where it was found that superannuation is payable on the gross loss of income not net loss. The Court adopted an approach of using 11% of the net loss of superannuation to take into account that super is paid on gross loss and also different taxation treatment of such income.
As a result of the increase in superannuation over the coming years the 11% figure applies to super payable at 9%. When assessing future loss of superannuation we need to “gross up” the future loss which means the percentage used depends on the years to retirement and can be between 11.61% and 14.16%.
For example; 5 years to retirement is 11.61%, 10 years is 12.44%, 20 years is 13.44% and 30 years is 13.85% and so on up to 14.16%.
