Allowing Aboriginal and Torres Strait Islander people to access superannuation early goes against the principles of the super system, the prime minister's department says.
But the department also says super funds should be more culturally aware about the needs and life expectancy of indigenous people.
The banking royal commission asked for submissions on a range of issues, including whether First Australians should be allowed to access superannuation earlier due to lower life expectancy.
"PM&C cautions against measures that would reduce the preservation age for a particular group in the Australian community as it runs counter to the universal aspect of the superannuation system," the prime minister's departmental submission said.
"Fundamental to improving superannuation services and access for Aboriginal and Torres Straits Islander people is increasing the superannuation sector's awareness of the range (of) culturally appropriate considerations regarding the administration and release of funds."
National Australia Bank supports further consideration of whether life expectancy should be considered in when indigenous people can access super.
"This issue goes to the very crux of the potential disadvantages faced by Aboriginal and Torres Strait Islander people in respect of their superannuation," NAB's submission said.
ANZ also supports taking life expectancy into account, but said the law would need to be changed in order for that to happen.
Indigenous people are also disproportionately affected by a lack of flexibility in superannuation laws, which it make it hard for trustees to distribute funds differently based on an individual or group's life expectancy.
The Australian Securities and Investment Commission said there was a valid life expectancy argument, but could result in indigenous people winding up with a lower balance overall.
"Were the preservation age to be lowered for indigenous members, this would result in indigenous members not receiving the benefit of the largest growth phase of a superannuation account," it wrote.
