Australians back change to make super fairer for workers under 18: Rest

Rest, one of Australia’s largest profit-to-member superannuation funds, has urged the Australian Government to remove an unfair rule that prevents most workers under-18-years-old from earning any superannuation, with research showing an overwhelming majority of Australians agree with the change.

Research conducted for Rest by CRNRSTONE, has found that 82 per cent of Australians think the law should be changed so that young Australian workers under the age of 18 earn superannuation regardless of how many hours they work.

Currently, workers under the age of 18 are only eligible for compulsory Superannuation Guarantee payments from their employer if they work more than 30 hours per week, although some employers already voluntarily pay this.

The research also found that 66 per cent of Australians were not aware of this rule, and 77 per cent said that the rule was unfair.

In the lead up to the Federal Budget, Rest Chief Executive Officer Vicki Doyle called for the Government to remove this unfair rule and said making the change would ensure that everyone, including young workers in retail or fast-food jobs, gets a fair start with their superannuation.

“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,” said Ms Doyle.

"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."

Industry modelling shows that the change could have a positive financial impact on young Australians, with the average under-18-year-old potentially boosting their age-67 retirement balance by over $10,000 in today’s dollars. It would positively benefit around 375,000 young workers each year.¹

"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," added Ms Doyle.

More than 90 per cent of under-18 workers work fewer than 30 hours per week, and nearly three quarters of them work in the accommodation and food services and retail trade industries.²

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

"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."

The reform was one of six recommendations Rest made to the Australian Government in its 2024/25 Pre-Budget Submission earlier this year, which aim to improve members’ retirement outcomes and the world in which they will retire into.