More than half a million young workers are currently excluded from being paid superannuation, research has revealed. (Source: Getty) <\/p>\n
An \u201coutdated\u201d superannuation rule<\/a> will cost thousands of workers a combined $98 million in their retirement savings<\/a> this financial year, new research has revealed. The law was created decades ago, and there are calls for an urgent overhaul.<\/p>\n Under rules designed in the 1990s, workers aged under 18 are only legally required to be paid super<\/a> if they work more than 30 hours a week for one employer. This rule was initially designed to stop fees from eroding low-balance super accounts<\/a>.<\/p>\n New analysis by the Super Members Council found 119,000 under-18 workers in NSW will miss out on an average of $815 in super contributions<\/a> this year, to the tune of $98 million. Nationally, about 515,000 workers will be excluded from receiving a combined $405 million.<\/p>\n RELATED<\/p>\n Super Members Council CEO Misha Schubert said under-18s were being \u201cshortchanged\u201d in their retirement savings<\/a> due to the rule.<\/p>\n \u201cIt\u2019s time to fix it. The sooner you get super, the more it\u2019ll look after you. Missing out on super before 18 can cost some young people $11,000 by retirement,\u201d she said.<\/p>\n \u201cEqual opportunity shouldn\u2019t start at 18. Let\u2019s give young workers a better future and pay super to all under-18s.\u201d<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n The super advocacy group found that a typical female teenager could have nearly $2,500 more in her super by the age of 18 if the rules were changed. This could grow into $11,000 more by retirement with investment returns.<\/p>\n A typical male teenager could have $2,000 more super by the age of 18, which would translate to an extra $9,000 by retirement. That\u2019s due to males being more likely to already work in jobs where full-time hours are common, such as working as tradies<\/a> or labourers.<\/p>\n One of Australia\u2019s biggest super funds, Rest, has also supported calls for all young workers to earn super regardless of how many hours they work.<\/p>\n When the superannuation system was established in 1992, the rules for under-18s were put in place to ensure already low contributions and balances weren\u2019t eaten away by fees.<\/p>\n However, the Super Members Council argues that this reasoning no longer stacks up as there are fee protections in place.<\/p>\n As part of the Protecting Your Superannuation Package<\/a>, there is a 3 per cent cap on administration and investment fees for accounts with balances below $6,000.<\/p>\n In November, the Australian Greens moved an amendment to allow under-18 workers to be paid super contributions regardless of hours worked from July 1, 2026. However, this proposal was rejected by Labor and the Coalition.<\/p>\n The Australian Chamber of Commerce and Industry previously argued that introducing such a change would add an \u201cextra layer of red tape\u201d and add to \u201calready high transactional costs for small business employers taking on young workers\u201d.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n