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Research shows support for u18s to earn unconditional super

Yasmine Masi14 May 2024
Leaking piggy bank

Australian superannuation fund, Rest, has released new research in the lead-up to tonight’s Federal Budget, calling for reform to ensure workers aged under 18 years are paid super no matter how many hours they work.

The research, conducted by CRNRSTONE and informing the fund’s pre-Budget submission, found 82 per cent of Australians surveyed agree the law regarding the compulsory Superannuation Guarantee should be changed to enable young Australians under 18 years old to earn superannuation even if they work less than 30 hours per week.

The survey revealed 66 per cent of people did not know about the rule, despite some employers voluntarily paying superannuation to their workers aged under 18 and working less than 30 hours a week, and 77 per cent called the rule “unfair”.

“Rest represents around one million members aged 30 or younger, so we know how beneficial it is for members to set themselves up for their best-possible retirement from day one,” Rest Chief Executive Officer, Vicki Doyle, said.

“We have a very clear ask of Government. Every worker under the age of 18 should earn super regardless of how many hours they work.

“This change would mean that every young Australian can engage with and benefit from our super system from the day they earn their very first dollar.”

According to modelling and analysis from Industry Super Australia (ISA), ensuring young working Australians are unconditionally paid super would increase their retirement savings balance by age 67 by more than $10,000 and would benefit over 375,000 young workers every year.

The analysis also showed that more than 90 per cent of workers aged under 18 do not meet the 30-hour threshold per week to be paid compulsory superannuation, with close to 75 per cent working in accommodation, food services and retail trade.

“This change will provide a real financial boost for so many young people, who’ve carried a significant burden in recent years through the COVID-19 pandemic and the cost-of-living crisis. It will also help deepen the connection young people feel with their super from their first day in their first job,” Doyle said.

“Some employers, such as IKEA Australia, already voluntarily provide superannuation contributions to all their under-18 workers, regardless of hours worked.

“However, we know this change is likely to have an impact on a number of employers, particularly small and medium businesses, who employ part-time or casual workers.

“This change is crucial for the future of young Australians and an opportunity for the superannuation industry to work together with employers to improve member outcomes. This is why we’re advocating for a detailed consultation process and a multi-year staged implementation, which appropriately considers the feedback from all stakeholders.

“This change could also simplify employers’ superannuation obligations, particularly those who employ workers whose hours vary from week to week.

“This reform is the natural next step in making the superannuation system fairer and more equitable for Australians, improving financial outcomes for our members.”

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