The Super Members Council (SMC) has called for superannuation to be paid to all employees under the age of 18 following research showing current restrictions could prevent younger workers from an aggregate $405 million of retirement savings in 2025/26.
Under current law, employers are only required to pay workers under 18 super if they work more than 30 hours a week for one employer.
Recent SMC analysis found as many as 119,000 individuals under the age of 18 in New South Wales alone will miss out on an average of $815 in super contributions this year. Applied nationally, it means around 515,000 of this cohort will suffer the same fate.
The industry body recognised the original exclusion was made to prevent fees eroding small balance accounts, but that this reasoning has become redundant given other protections are now in place to protect these lower balances.
“Under-18 workers in New South Wales will be short changed $98 million in retirement savings this year because of this outdated rule. It’s time to fix it,” SMC chief executive Misha Schubert said.
“The sooner you get super, the more it’ll look after you. Missing out on super before 18 can cost some young people $11,000 by retirement.”
Schubert pointed out the existing rule also has a gender bias, given teen girls are more likely to work in retail and community service jobs with fewer hours, while teen boys are more likely to work as tradies and labourers where full-time hours and apprenticeships are common, giving them guaranteed super.
To this end, the council suggested abolishing the 30-hour threshold would help close the gender super gap.
“Equal opportunity shouldn’t start at 18. Let’s give young workers a better future and pay super to all under-18s,” Schubert indicated.
Adding to the super body’s argument is the fact a Pyxis survey revealed 73 per cent of Australians support the change.
