Calls intensify to scrap unfair U-18s super ‘loophole’

Yasmine Raso

Senior Journalist, Financial Newswire

12 December 2025

New modelling from the Super Members Council (SMC) has further intensified calls urging the government to dump an “outdated” law that imposes “unfair” rules on the ability of most workers under the age of 18 to earn superannuation, emphasising that it is worsening the gender super gap. 

The current rules only guarantee super to under-18 workers who work more than 30 hours a week for one employer and were originally implemented to safeguard low-balance super accounts from fees. With fee protections for small balances now in place, the SMC’s analysis has determined that the exclusion can leave women in particular up to $11,000 worse-off in retirement.

With the threshold removed for approximately 515,000 young Australian workers, modelling shows a typical teenage girl could have an additional $2,500 and a typical male an additional $2,000 in super by the time they turn 18.

Super Members Council chief executive, Misha Schubert, said implementing these reforms would not only make the superannuation system fairer but would improve compliance for employers and provide a ‘smoother start’ to work for Australian teenagers.

“It’s simply not fair that young women today are missing out on thousands of dollars in retirement savings because of this outdated rule. The super gap starts from day one of men and women’s working lives – and that needs to be fixed now,” she said.

“Ensuring all under-18 workers are paid super will be another big stride forward to help close the gender gap and guarantee every young Australian a super start to work.”

Industry super fund, Rest, also signalled its support of the change in delivering more “equitable retirement outcomes”.

“By changing this unfair law, not only can we help countless young Australians have a fairer start with their super, we can also help close the gender super gap,” Rest Chief Member Officer, Simone Van Veen, said.

“Women under the age of 18 are less likely to work more than 30 hours than men.2 We also know female Rest members of this age typically have smaller monthly contributions than under 18 male members.

“By the time they’re nearing retirement in their 60s, our female Rest members typically face a gender super gap of 27%.

“Changing this law would mean we are taking another step to close this gender super gap for young women from day one of their working life.”

Research commissioned by Rest also confirmed that the majority of its members also supported the change, with 98 per cent agreeing it was important for all working Australians to earn superannuation regardless of hours worked or income earnt and 71 per cent agreeing super should be payable to all workers under the age of 18 regardless of hours worked.

“We represent more than 1 million young members under the age of 30, many who work in part-time and casual roles. Every worker under the age of 18 deserves to earn super and receive the benefit of compounding returns no matter how many hours they work,” Van Veen said.

“We urge the Government to commit to this change and include a thorough consultation process and multi-year staged approach to implementation to ensure the impact to employers is properly considered.”