When the Superannuation Guarantee was introduced in 1992, certain elements were negotiated into the design to secure passage of the Bill. One such element was that U18s need to work more than 30 hours per week with one employer to be entitled to super.

Discussions at the time suggest the reason for this feature was concern that small super balances would be eroded by fees and insurance, potentially making redundant the collection of super for this cohort.

The world has since moved on and protections are now in place for those with small super balances to reduce their erosion by fees and unnecessary or unwanted insurance cover. Administration and investment fees (including indirect costs) are now capped at 3 per cent per annum for members who have a final balance of less than $6,000 for their MySuper or choice product in an income year. So even for those who work only a few months across the year, average returns on their balances are likely to exceed the fee cap, meaning balances in an average year will continue to grow rather than be eroded.

This report examines how extending the Superannuation Guarantee to all ordinary time earnings by workers under 18 years of age, not just for those who meet the 30 hour per week threshold, would improve members’ retirement outcomes and deliver broader social and economic benefits.

• Section 1: examines under 18 workers’ current entitlement to the Superannuation Guarantee, and which under 18 workers receive superannuation.
• Section 2: quantifies just how much the current rules leave younger workers worse off in retirement, and the number of people affected.
• Section 3: outlines other benefits from extending super to all under 18 workers.