Report warns outdated super rules push informal carers into retirement poverty

Advocacy groups are urging the federal government to overhaul superannuation laws after a new report revealed more than one million Australians are still excluded from the Super Guarantee, leaving thousands poorer in retirement.

A report by the Super Members Council found unpaid carers, part‑time workers under 18, domestic workers and gig workers continue to miss out on compulsory super contributions because of outdated rules that no longer reflect modern work patterns.

Unfinished Business: Fixing Gaps in the Super Guarantee recommends that the government to begin paying the 12 per cent Super Guarantee on the Carer Payment.

The Council estimates this would deliver an average of $3,072 a year in super to 334,000 unpaid carers – most of whom are women – and leave a typical 45‑year‑old carer $45,000 better off at retirement.

Council chief Misha Schubert said the findings highlight a system that is still falling short of its universal promise.

“Australia’s super system is meant to be universal, but today more than a million Australians are still missing out on the same guarantee as 17 million of their fellow Australians,” she said.

“That’s just not fair.”

The Carer Payment, which is means‑tested, supports people who step away from paid work to provide constant care for a person with disability, chronic illness or frailty.

But unlike paid parental leave, the Carer Payment does not attract super contributions, despite many carers spending years or even decades out of the workforce.

COTA Australia, Carers Australia and Women in Super all backed the call, warning that without reform, carers will continue to face what advocates describe as a “carer poverty penalty”.

“Looking after a loved one should not mean facing poverty in retirement,” COTA Australia chief Patricia Sparrow said.

“Superannuation for carers is a practical way to recognise unpaid care and help ensure more Australians can retire with dignity.”

The report also recommends removing other long‑standing exclusions, including the rule that denies super to under‑18s working fewer than 30 hours a week.

The Council estimates this costs 515,000 teenagers $405 million in super this financial year alone.

Domestic workers, such as cleaners, housekeepers and nannies employed in private homes, are also excluded unless they work more than 30 hours a week for the same employer.

The report finds 37,000 domestic workers, 86 per cent of them women, miss out on nearly $150 million in super each year.

Gig workers remain another major gap, with around 184,000 people in app‑based or contractor roles missing out on an average of $2,220 a year in super.

Advocates say closing these gaps would not only boost retirement incomes but also reduce long‑term pressure on the Age Pension.

The government has not yet responded to the report’s recommendations.