An "out-of-date" and "unfair" law that prevents most under-18s from receiving compulsory superannuation contributions from their employers is costing them more than $10,000, new modelling from Industry Super Australia (ISA) shows.
Only under-18s who work more than 30 hours a week for the same employer are required by law to be paid .
It means around 375,000 of Australia's youngest workers will miss out on a combined total of around $330 million in 2023-24, according to ISA.
The average of $855 in super that workers aged under 18 each missed out on, would grow to $10,200 by the time they're 67-years-old, the modelling shows.
"This is an out-of-date law that discriminates against our youngest workers just as they're starting out — it's unfair and the law needs to be modernised," ISA chief executive Bernie Dean said.
"Removing the 30-hour threshold wouldn't just be fair for young workers, it would be good for the employers who have to face the administrative nightmare of keeping track of the weekly hours of a highly casual workforce."
Thomas Walker is a lead economist at think tank Think Forward which advocates for intergenerational fairness issues to be central in Australian politics.
He says the current system was "based on outdated assumptions" from when superannuation was introduced in 1992.
"The theory went that if young people received superannuation, fees and insurance would eat away at the super that was going in because they weren't earning enough to make it worthwhile," he told SBS News.
"But with recent changes to the law and how superannuation is administered, that's no longer the case."
Those changes include fee caps on lower account balances, and insurance not being automatically offered to under 25s and those with less than $6,000 in super.
Walker said opening compulsory contributions up to all Australian workers could also result in more people having a better understanding of the "complex" superannuation and taxation systems at an earlier age.
"We should be encouraging young people to understand that these systems are there to benefit their lives, whether it's paying tax or paying super," he said.
"Age discrimination" affecting young people in the workplace
Walker said the superannuation issue wasn’t the only "age-based discrimination" young working people faced in Australia.
"This is part of a bigger problem around how we view younger people in the workplace," he said.
Walker said one example is junior rates, where depending on their award, enterprise agreement or other registered agreement, under 21s are paid less than their older colleagues for the same amount of work. The percentage of the adult pay rate that junior workers receive is usually based on their age and increases with each birthday.
"There are plenty of teenagers who are highly-competent workers … and they should be paid a wage that's equal to the work they're putting in.
"We also see big businesses sort of exploiting this and using young workers and then moving them on when they get too old and too expensive to pay."
Countries like New Zealand and Canada have restricted or removed junior rates because of their discriminatory nature, Walker said.
