Super legislation impacting teen workers faces further scrutiny

The Super Members Council has found that in 2025–26, employers will withhold $98 million in super that could have gone to workers under the age of 18.

From the introduction of superannuation in 1992, workers aged under 18 who worked part-time were excluded from receiving super, due to fears that fees and insurance would erode these smaller super balances.

This concern is no longer relevant as fees are now capped on lower account balances, and insurance is no longer automatically offered to super members under the age of 25 with a super balance of less than $6,000. Despite this, the decade-old legislation remains in effect.

Significant losses

In its research, the Super Members Council (SMC) revealed that 119,000 under-18 workers in NSW will, on average, lose $815 in super contributions this year, while 515,000 workers around the nation will lose a combined $405 million, due to legislation.

Currently, employers are not required to pay under-18 workers super if they work part-time (less than 30 hours a week) in one role, based on the Superannuation Guarantee (Administration) Act 1996 (the 1996 act). In its 2025–26 pre-budget submissions, superfund Rest Super called the imposition of this rule “discriminatory and arbitrary”.

The impacts of these active laws are major and far-reaching. Based on the Rest Super’s research, 93 per cent of workers under 18 “usually” work less than 30 hours per week in all jobs.

Support for change garnered significant support. A Pyxis survey found that 73 per cent of Australian respondents support a change in the 1996 act so that workers of all ages get paid super, while only 7 per cent of respondents opposed the change.

Gender pay gap

Based on a recent report by SMC, scrapping the 30-hour threshold will also help close the gender pay gap, as currently, women retire with 25 per cent less super than men.

The research found that teenage girls – who are more likely to work part-time – could have up to $2,500 more in their super by the time they turn 18 – which could grow into $11,000 more by retirement after investment returns, if the law is overturned.

The difference in industries worked in also contributes to the under-18 gender pay gap. Teenage girls are more likely to work in retail and community service jobs, which provide less than 30 hours of work per week; whereas, teenage boys are more likely to work as tradies and labourers, in which full-time hours and apprenticeships are common – providing them with guaranteed super.

Rest chief member officer Simone Van Veen said: “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.”

Now is the ‘time to fix’ these issues

“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,” Veen said.

Misha Schubert, SMC chief executive, stressed that it is “time to fix” these impacts on young workers and the gender pay gap by abolishing the 30-hour threshold. She noted the compound interest gains of super, and the $11,000 cost of under-18 workers missing out on super.

“Equal opportunity shouldn’t start at 18. Let’s give young workers a better future and pay super to all under-18s,” Schubert said.

SMC noted that the removal of this exclusion would make legal compliance for employers easier, allowing a smoother start to work for teenagers. It also noted that this change would have a “small aggregate impact on business” as it comprises only 0.03 per cent of the national payroll. It supports a phased approach for the change to minimise and manage the impact on businesses.

In a statement, Greens Senator Barbara Pocock said: “By including all workers under 18 in the superannuation system, we can set young people up for a more secure retirement while recognising their valuable contribution to the workforce.”