Teenage workers are missing out on $405 million superannuation due to outdated rules, prompting calls to scrap the under-18s carve-out.
The Super Members Council (SMC) has called on the Australian government to abolish an outdated law that denies superannuation to most workers under 18.
SMC analysis shows around 515,000 teenage workers are expected to miss out on a combined $405 million nationally.
Under current rules, workers under 18 are only guaranteed super if they work more than 30 hours a week for one employer.
The council said the exclusion was originally designed to prevent fees eroding low-balance accounts, but that rationale no longer applies given existing fee protections for small super balances.
Public support for reform appears strong as a recent Pyxis survey found 73 per cent of Australians support changing the law so workers receive super at all ages, while only 7 per cent oppose such a change.
The SMC said the rule also entrenches gender inequality from the very start of working life.Its research found scrapping the 30-hour threshold would help close the gender super gap, with teenage girls disproportionately affected because they are more likely to work part-time.
The report found that if all under-18s were guaranteed super, a typical teenage girl could have nearly $2,500 more in her account by age 18, growing to around $11,000 more by retirement with investment returns.
Teenage girls are more likely to work in retail and community service roles with shorter hours, while boys under 18 are more commonly employed in trades and labouring jobs where full-time hours and apprenticeships are more prevalent, giving them guaranteed super.
The council said removing the carve-out would also simplify compliance for employers and smooth the transition into work for young people and estimated the aggregate cost to business would be minimal, at around 0.03 per cent of national payroll, and supports a phased approach to manage the impact.
SMC chief executive Misha Schubert urged the government to act.
“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.
“A fair go shouldn’t be denied until you turn 18. Let’s give young workers a better future and pay super to all under-18s.”
