Retirement
Rest calls for reform of superannuation rules for young workers
In a bold move to enhance the financial future of young Australians, superannuation fund Rest is advocating for the abolition of what it deems an "unfair and outdated" rule affecting under-18 workers. The current regulation prevents the majority of these young employees from receiving regular compulsory superannuation contributions unless they work more than 30 hours a week. Rest argues that changing this rule could significantly boost the retirement savings of young Australians, potentially adding thousands of dollars to their superannuation accounts over a lifetime.
Rest calls for reform of superannuation rules for young workers
In a bold move to enhance the financial future of young Australians, superannuation fund Rest is advocating for the abolition of what it deems an "unfair and outdated" rule affecting under-18 workers. The current regulation prevents the majority of these young employees from receiving regular compulsory superannuation contributions unless they work more than 30 hours a week. Rest argues that changing this rule could significantly boost the retirement savings of young Australians, potentially adding thousands of dollars to their superannuation accounts over a lifetime.
According to Rest's analysis, which forms part of its 2026-27 Pre-Budget Submission, a 15-year-old entering the workforce today could see an increase of $18,100 in their retirement savings, in today's dollars, if the rule were amended. Rest's Chief Executive Officer, Vicki Doyle, emphasised the significance of this change, stating, "The overwhelming majority of under-18 workers are not eligible for compulsory super contributions because they work less than 30 hours a week. Because of this outdated rule, most under-18 workers are missing out on a financial benefit the rest of us are entitled to and we strongly believe this needs to change."
The current legislation stipulates that workers under 18 are only entitled to Superannuation Guarantee payments from their employers if they work more than 30 hours per week. However, some employers voluntarily provide these benefits regardless of hours worked. Rest's analysis reveals that extending compulsory superannuation to all under-18 workers, regardless of hours worked, could bring substantial financial benefits. For instance, a typical 15-year-old Rest member could gain approximately $3,400 extra in super by their 18th birthday and an estimated $18,100 by retirement.
Doyle further elaborated on the potential impact, noting, "A 15-year-old starting a job today is unlikely to receive many super contributions for the first 3 years of their working life. Our new analysis shows how meaningful those extra 3 years of super could be. Even an extra year of super for a 17-year-old member could provide a $7,000 boost, in today’s dollars, at retirement."
The call for reform is not just about financial gains; it is also about fairness and equality in the workplace. Doyle pointed out the inconsistency in the current system, saying, "It doesn’t make sense that a 15-year-old and an 18-year-old could work side by side in the same job, and only one of them is entitled to compulsory super. It’s time to give these young Australians a fairer start."
Rest's proposal aligns with broader industry goals to close the gender super gap and improve financial outcomes for young Australians. Doyle highlighted the widespread support for the reform, stating, "Rest represents more than 1 million members under the age of 30 and we are determined to see reforms that help them achieve the best foundation for their future life. We urge the Government to extend the Superannuation Guarantee to all workers under 18 who work less than 30 hours per week."
The proposed changes are part of a broader set of recommendations in Rest's Pre-Budget Submission. These include urging the government to legislate Tranche 2 of the Delivering Better Financial Outcomes reforms, aimed at providing affordable and accessible financial advice for super fund members. Additionally, Rest is advocating for the removal of barriers that prevent super funds from investing in members' best financial interests, such as reforming the annual superannuation performance test and reclassifying stamp duty under ASIC Regulatory Guide 97.
Doyle concluded with a call to action, encouraging the government to engage in detailed consultations to assess the impact on employers and implement the changes through a multi-year, staged rollout. "Industry modelling shows this change could help close the gender super gap, and our research confirms the reform has overwhelming support among our members. We strongly encourage the Government to engage in a detailed consultation to consider the impact on employers and implement the change with a multi-year, staged rollout," she stated.
Rest's push for reform highlights the need for policy adjustments that reflect the evolving nature of the workforce and ensure equitable financial opportunities for all Australians, regardless of age.
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