Almost 90,000 youngest Qld workers lose $1035 in unpaid superannuation annually

An obscure superannuation rule is costing young Queensland workers thousands over the course of their working life.

Brisbane woman Cara Rowe remembers working while underage and not receiving super contributions. Her 14-year-old sister has just started working. Picture: Steve Pohlner

Almost 90,000 of Queensland’s youngest workers are denied an average of over $10,000 for their retirement due to an outdated rule, new research reveals.

Employees under 18 don’t get compulsory superannuation payments if they don’t work more than 30 hours per week, with Industry Super Australia equating this to $1035 lost annually.

If these contributions were paid and invested in a super fund, they would grow to $10,200 for each worker upon retirement, according to Industry Super Australia’s new report.

On a national scale, this legislative loophole costs 375,000 Australian teenage workers a combined total of $330 million each year, Industry Super Australia claims.

Industry and youth advocates say employers have been “manipulating the system” for too long, and they believe there is now momentum for change amid a cost-of-living crisis.

Cara Rowe, currently working while also studying full-time, was employed at an independent grocery store and restaurants as a teenager and experienced employer discrimination.

“My employer would say: ‘If you are under 18, you can’t work more than 25 hours per week.’ They never explicitly said why, but why else would they say that?” she said.

“I started working at 15, I think now about how much money (lost superannuation) that would have been, it is a tonne of money that you could put towards retirement or a trip.

“Young people already face a lot of discrimination when entering the workforce, with their pay being a lot less than others, and poor treatment from older staff.

“If you are old enough to pay tax on your income, you should get the benefits of that income, which includes compulsory superannuation contributions.”

The theory behind the under 18s superannuation rule was to alleviate concerns that fees and insurance would eat into smaller superannuation balances of teenage workers.

But in 2018, fees were capped on low balance superannuation accounts, and insurance was no longer automatically offered to those under 25 with a balance of less than $6000.

Australian Youth Affairs Coalition co-chair Caitlin Figueiredo believes the outdated rule has slipped under the radar due to competing federal government priorities.

“I honestly can’t believe we have this level of discrimination against young people enshrined in legislation,” she said.

“It reminds me of when I was 18 and working part-time and I found I had never been paid superannuation … it’s not fair because we still paid tax.”

Industry Super Australia chief executive Bernie Dean at a hearing at Parliament House in Canberra in 2019. Photo: Kym Smith.

Industry Super Australia chief executive Bernie Dean said removing the 30-hour threshold would benefit teenage workers, but also ease the administration workload on employers by removing the need for them to religiously keep track of the hours their under 18s work.

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

“Locking thousands of the state’s young workers out of our world-class retirement savings system is not giving them the super start to work they deserve. How can we explain that young workers don’t get super while an older colleague doing the same job does?”

Ms Figueiredo believes there is now momentum for change.

“It’s coming back on the agenda … people in industry and the youth sector want to give young people a fair go and encourage more young people to enter the workforce,” she said.