U18 workers ‘denied’ $350m+ in super per year: SMC report

Yasmine Raso

Senior Journalist, Financial Newswire

13 November 2024

A new report from the Super Members Council (SMC) has found that over half a million of Australian under-18 workers are missing out on around $368 million in super contributions per year.

This is due to approximately 90 per cent of working teenagers not meeting the 30 hours of work per week threshold to earn compulsory superannuation contributions.

According to the report, under-18 workers could be $10,000 better off upon retirement age if the “outdated exclusion… was abolished”.

“Every Australian worker, at every age, deserves the right to set themselves on the path to a dignified retirement,” Super Members Council CEO, 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 Super should be for everyone, paid from the first hour of your first job, and fixing this outdated exclusion is overdue.

“As every smart investor knows, thanks to the magic of compound returns, a dollar invested early in life in super has the most power to grow our retirement savings exponentially over our lives.”

The data collated in the report suggested that an average teenager who works for at least two years would have close to $2,200 more in the super savings by 18 years old.

The SMC report also indicated that removing the threshold would also simplify and streamline the administration of employees, including the tracking of hours, and reduce the risk of underpayment.

“The recommendation to make super universal for under-18 workers is a crucial step towards an even fairer and more inclusive super system,” Schubert said.

“It will help young Australians to have a consistent and positive experience of Australia’s super system from the start of their working lives.”

“This is a modest investment for our children’s future – adding just 0.03% 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.”