Many studies have established a link between phonological abilities (indexed by phonological awareness and phonological memory tasks) and typical and atypical reading development. Individuals who perform poorly on phonological assessments have been mostly assumed to have (or "fuzzy") phonological representations, with typical phonemic categories, but with greater category overlap due to imprecise encoding. An alternative posits that poor readers have phonological representations, with speech sounds perceived allophonically (phonetically distinct variants of a single phonemic category). On both accounts, mismatch between phonological categories and orthography leads to reading difficulty. Here, we consider the implications of these accounts for online speech processing. We used eye tracking and an individual differences approach to assess sensitivity to subphonemic detail in a community sample of young adults with a wide range of reading-related skills. Subphonemic sensitivity inversely correlated with meta-phonological task performance, consistent with overspecification.