Modelling finds 'outdated' law costing teens $411m in superannuation

An estimated $411 million in superannuation contributions is being lost annually by under-18 workers across Australia due to existing legal restrictions, according to recent modelling by the Super Members Council. In Victoria alone, approximately 156,000 teenage workers are missing out on an average of $735 in superannuation each year, totaling $115 million for the state in the 2026–27 financial year. The findings highlight a growing concern over the fairness of current superannuation rules for young employees. The Super Members Council, which represents profit-to-member superannuation funds, pointed out that under-18s are excluded from guaranteed superannuation contributions unless they work more than 30 hours per week for a single employer. This rule disproportionately affects part-time and casual teenage workers, who often hold positions in sectors such as retail, hospitality, and community services. According to the council’s analysis, 91 percent of under-18 workers in New South Wales earn less than 30 hours weekly, leading to an estimated $105 million in missed super contributions in that state alone. Misha Schubert, chief executive of the Super Members Council, described the situation as unfair and discriminatory. She noted that the law effectively denies young workers a fundamental workplace right enjoyed by 17 million other Australians. “A young person who earns a wage should also be paid super,” she stated. “This outdated and discriminatory law treats teen workers differently just because of their age and their hours.” Schubert emphasized the long-term impact of missing out on early superannuation contributions. A typical part-time teenager could lose $2,500 in super by the age of 18, potentially compounding to $11,000 by retirement. The council argues that these early contributions are crucial because they allow for extended compounding periods, which significantly increase savings over time. Reform efforts are gaining momentum, particularly through federal political channels. The Greens have taken the lead in pushing for change, introducing an amendment bill into parliament earlier this month. They also secured a Senate inquiry into the issue, scheduled to report back to Parliament in November. A Greens spokesperson highlighted the need for young workers to receive the superannuation they deserve, stating that the current exclusion of under-18s based on working hours constitutes legislated age-based discrimination. At the federal level, Treasurer Jim Chalmers has expressed support for reforming the superannuation laws affecting under-18s. He acknowledged the importance of strengthening the superannuation system to benefit more workers but has not yet proposed specific legislative actions. Earlier this year, delegates at the Labor Party’s National Conference voted to include a policy aimed at extending compulsory superannuation payments to all under-18s, regardless of their working hours. However, opposition to the reforms exists within certain business circles. The Australian Chamber of Commerce and Industry raised concerns about the potential consequences of expanding superannuation requirements for young workers, warning that it could place additional burdens on small businesses and the broader private sector. Their stance reflects ongoing debates about balancing the rights of young workers with the operational realities faced by employers. The call for reform underscores a broader discussion about the future of Australia’s superannuation system and its ability to meet the needs of a diverse workforce. As discussions continue, the outcome will likely depend on negotiations between policymakers, industry representatives, and advocacy groups seeking to ensure equitable treatment for all workers, including teenagers entering the labor market for the first time.