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Industry funds push to end superannuation age discrimination
Young Australians are key stakeholders in priority recommendations industry funds have made in their pre-budget submissions.
The Super Members Council has doubled down on its calls for the abolishment of “age discrimination” in super in its pre-budget submission, including it as one of just three recommendations.
The SMC has for some time argued for super to be paid to all workers under 18, even commissioning research last year to show the head start younger generations would receive if the exclusion was abolished.
Namely, a report released by the council in November pointed to Australia’s under-18 workers having some $10,000 more at retirement if the current rules are changed.
“Every Australian worker, at every age, deserves the right to set themselves on the path to a dignified retirement,” the CEO of the SMC, Misha Schubert said.
“Australians strongly support universal super – and know it’s a workplace right. Super should be for everyone, paid from the first hour of your first job, and fixing this outdated exclusion is overdue.”
The call for the law to be tweaked has since made its way into the pre-budget submissions of several super funds, including Rest, which labelled the recommendation a priority.
“Rest’s priority recommendation is that the government extend the Superannuation Guarantee to all under-18 workers, including those working less than 30 hours per week, with an appropriate transition period for businesses,” the fund said.
Rest, which represents more than 1 million members under the age of 30, said that the current law disproportionately excludes most young workers, as 93 per cent typically work less than 30 hours per week – under the Superannuation Guarantee (Administration) Act 1996, part-time employees under 18 must work over 30 hours per week to qualify for compulsory super.
“Industry modelling shows the significant benefits of extending the super guarantee to under 18s. Extending the full benefits of compulsory super to under 18s would mean around 505,000 workers across Australia would receive, on average, $730 in additional super contributions in 2024–25, amounting to an extra $368 million in super contributions in total in 2024–25,” Rest said in its pre-budget submission.
The fund also said that there is overwhelming community support for this change, citing its own research that it said revealed that 82 per cent of Australians think the law should be changed so that young Australian workers under the age of 18 earn super regardless of how many hours they work.
Interestingly, HESTA did not raise the age “discrimination” in its submission, prioritising instead “more equitable distribution of super tax concessions”.
Like other funds, HESTA would like to see the low-income superannuation tax offset (LISTO) adjusted so low-income workers are not taxed more on their super than on their wages.
Moreover, HESTA said it supports taxing investment earnings on accounts of $3 million or more at the top personal income tax rate to ensure super tax concessions are more equitable.
AUTHOR
Maja Garaca Djurdjevic
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