Superannuation
Students are entitled to superannuation under certain conditions. Your child may be completely unaware of superannuation entitlements.
Superannuation makes up an important part of remuneration. Your child may not be certain how this works in relation to their pay.
Superannuation is a way of saving money to support yourself after you have retired from work. It is money your employer is legally required to deposit into a superannuation fund. This grows during your working life and earns interest, so you have money available to you when you reach official retirement age.
The law requires employers to pay 9% in superannuation to employees, including students, who:
- Earn at least $450 per month; and
- if aged below 18, work at least 30 hours a week.
That 9% is in addition to the take home wage.
Some Awards and Agreements have Superannuation clauses written in to them which mean that even if an employee doesn't meet these criteria, superannuation contributions will be made to a superannuation account on their behalf by the employer.
If a student meets these criteria, or are entitled through their Award or Agreement to superannuation, they need to ensure your employer is making appropriate contributions to a superannuation fund of their choice. The employer will give your child a 'Standard Choice form'. As a parent, you are likely in the best position to advise your child on the choice of fund; the choice could make a substantial difference to thir savings over the course of their working lives.
However, if the student doesn't make a choice, the employer will choose on their behalf. However, this could make it hard to keep track of when your child leaves that job and starts another job. It is best to compare the costs and benefits of different funds to make sure you are getting the best deal for your child.
Make sure your child keeps any information relating to their superannuation account so they know where to find it when they move through the workforce.
The Australian Securities and Investments Commission (ASIC) offers a lot of advice about choosing a Super fund, changing funds, and help with comparing funds.
Click here for the ASIC website section on Superannuation