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Super loophole costing young workers thousands

Young worker super

Young workers are missing out on $10,000 in super at retirement due to an outdated law.

Under a discriminatory law affecting 87,000 young Queensland workers, employers do not have to pay super to workers under 18 who work fewer than 30 hours per week.

Highlighted in a recent report Super Start to Work from Industry Super Australia (ISA), this unfair law costs young Queensland workers about $90 million a year.

The ISA’s report calls for super to be paid on all ordinary time earnings for workers aged under 18, just as it is for workers who are over 18.


CaraRowe4Cara’s story

Cara Rowe is a full-time university student. During her teenage years, Cara balanced 25 hours of casual work across two jobs in addition to her schooling.

Because she did not meet the threshold of 30 hours work per week for the same employer, Cara was not paid super at all during this time.

Cara said in her experience employers often had policies that young workers could not work more than 25 or 30 hours per week, simply so they could save money by denying super.

Cara said some employers even told young workers they should make voluntary contributions to their super themselves instead.

“Young people already deal with very difficult situations in their workplaces,” Cara said.

“That’s why it’s really important that we need to start paying them super.”

Cara said a teenage worker being denied $800 or $900 in super per year actually cost them thousands upon retirement.

“Because it’s compounding so early, young people are actually losing out on a lot of money because they would be earning super at such a young age,” she said.

Cara said it was time for the federal government to make changes to the law.


ISA says time for change is now

ISA Bernie DeanISA Chief Executive Bernie Dean spoke in Brisbane (pictured) about the report findings and said the ISA was leading a growing chorus of people calling for the law to change.

“[People] can see that it’s unfair that young workers under the age of 18 don’t get the same entitlements to superannuation as older workers do,” he said.

“We’ve got many young workers working 15-20 hours per week, they’re paying tax on those earnings but they’re not getting superannuation.

“They’re working next to a person who’s 18 who’s getting paid super; these young workers are missing out and the time for change is now.”

Bernie said changing the law also presented an opportunity for employers to modernise their payroll.

“There’s less administrative hassle in actually paying super to all workers, regardless of how many hours they work per week,” he said.


Young Workers’ Hub joins call for fairer super laws

ISA4-03-08-23The Queensland Unions Young Workers’ Hub has joined with the ISA in calling for an end to this archaic law.

Young Workers Hub Lead Organiser Connor Wood (pictured with Cara and Bernie, right) said the Hub heard from young workers all the time about being treated unfairly at work due to their age.

“Young workers feel that they’re being treated unfairly by a workplace system that was setup for a world that was entirely different than it is today,” he said.

“It’s really important that young people in the workplace who do the same job, who have the same conditions, get treated the same as their colleagues who could simply be a year older.

“These laws need to change to make sure that young workers, when they get to the end of their working life, have a comfortable retirement and they’re not unfairly penalised just for being young.”

Click here to read the ISA Super Start to Work report.