‘Unfair’ super law costing young workers thousands

Poppy Johnston
(Australian Associated Press)

Hundreds of thousands of young workers are missing out on super from their employers because of a rule that bars them from automatic contributions.

Under the law, under-18 workers are not entitled to compulsory super contributions unless they work 30 hours a week for the same employer.

Few young workers work such long hours and miss out on super contributions that their over-18 colleagues would get for the same job.

Numbers crunched by Industry Super Australia revealed teenage workers are heavily penalised by the rule, with the average young worker forgoing an extra $885 a year.

Upon retirement and after years of compound interest, this amounts to a $10,200 hit to their final super balances.

The industry super body wants the 30-hour threshold law removed.

Industry Super Australia chief executive Bernie Dean said modernising the rules would also benefit employers.

“Removing the 30-hour threshold wouldn’t just be fair for young workers, it would be good for the employers who have to face the administrative nightmare of keeping track of the weekly hours of a highly casual workforce,” he said.

The decades-old rules were intended to protect young workers from high fees that eat into low super balances.

But in 2018, administrative and investment fees on low-balance funds were capped.

“This is an out-of-date law that discriminates against our youngest workers just as they’re starting out – it’s unfair and the law needs to be modernised,” Mr Dean said.