The Super Members Council (SMC) has called for a removal of the “outdated” 30-hour threshold for workers under 18 to guarantee all young Australian workers receive a super start to work.
Under the current law, young Australians under the age of 18 are only required to be paid super if they work at least 30 hours a week for one employer.
According to the SMC, the intent behind this age exclusion was to stop fees and insurance premiums from eroding low-balance accounts as this law predates the creation of digital payroll software.
However, today there are fee caps and stronger protections on low-balance accounts, making the under-18s exclusion age-based discrimination and adding confusion for both young Australians and businesses, the council said.
The SMC said that in the 1990s, when super was introduced, the super rate was only 3 per cent and therefore there were concerns over smaller balances that could be eaten away by fees and insurance.
However, currently, the super rate is 11.5 per cent paid on top of wages and there are additional fee caps on low-balance accounts and limits on insurance for younger workers in place.
The council also said that a removal of the threshold would lessen risks of underpayment, which can be more challenging for businesses that increase staff hours over summer.
The SMC data showed that about nine in 10 teenagers do not qualify for the 30-hour threshold each week, denying approximately 505,000 young Australians about $368 million in total super contributions a year.
Moreover, paying super to all under-18s would result in almost $2,200 in their super accounts for typical teenagers who work at least two years by the time they turn 18. This amount is additionally projected to grow to almost $10,000 when they reach the retirement age.
The SMC acknowledged the impact on some businesses but, it said, with tax deductions, the total cost to business is only about $260 million a year and the council recommends a transition period to give businesses time to adjust.
A similar adjustment time was introduced in 2022 when the government ended another exclusion and required super to be paid for workers earning less than $450 a month.
SMC deputy CEO Georgia Brumby described the move as “a modest investment for our children’s future” and said that it would only add 0.03 per cent to total employee costs.
“SMC supports a phased transition and looks forward to working with employer groups to bring about this key reform in a way that enables a smooth implementation for business,” she said.
“Let’s not leave our teen workers high and dry this summer. Change the law so they can earn super, no matter how many hours they work.”
Brumby said that Australians strongly support universal super and, according to the SMC research, 85 per cent of the population thinks that anyone who does paid work should receive super contributions.
The SMC also believes that removing the 30-hour threshold would ease the administrative risk on employers, which currently must identify which under-18 workers exceed the 30-hour threshold, and the situation becomes even more complex in industries where casual work is widespread and where workers’ super accounts get closed by a fund when they are left inactive for too long.
“Super should be for everyone, paid from the first hour of your first job. Fixing this outdated exclusion is overdue,” she added.
