What is the low-income super tax offset?

What is the low-income super tax offset?

The LISTO is a super payment that the government makes to help people with low incomes save for their retirement. Think of it as a refund from the government for some of the tax that you pay on the money going into your super account.

The aim of the LISTO is to help eligible low-income earners save more for retirement by effectively refunding the 15% tax paid on their concessional contributions, up to $500. The LISTO can be beneficial for those who work part-time, casually, or have irregular income, as it can be extra hard for them to save for retirement.

How much can I get under the low-income super tax offset?

The LISTO is 15% of your before-tax super contributions you or your employer pays into your super fund. The maximum LISTO payment an eligible person can get in a financial year is $500 while the minimum is $10. If you're eligible for less than $10, the Australian Tax Office (ATO) will round up your LISTO amount to $10.

Keep in mind that it's not a recurring payment – you may be eligible one year and not the next. The amount an eligible person receives depends on how much they earn and the concessional contributions they have received in the financial year.

If you need help working out whether you’re eligible for the LISTO and how much you could receive, the ATO’s LISTO calculator is a good place to start.

Am I eligible for the low-income super tax offset?

To be eligible for the LISTO, you need to meet all of the following requirements:

• you or your employer make concessional (before-tax) contributions to your super fund in the financial year. This includes super guarantee amounts.
• you earn $37,000 or less in a year (see Income tests).
• you weren’t on a temporary resident visa at any time in the year (except New Zealand citizens in Australia).
• you lodge a tax return, and 10% or more of your total income comes from employment and/or business, or you don't lodge a tax return and 10% or more of your total income comes from your employment.

Read more at the ATO website.

What is the government co-contribution?

Under this scheme, the government may make a super co-contribution into an eligible person’s super account when they make a personal after-tax contribution, up to a maximum amount of $500. The scheme is designed to help low and middle-income earners boost their retirement savings.

It's important to note that the LISTO is separate from the government co-contribution scheme. It’s possible to be eligible for both the LISTO and the government co-contribution if you meet all the requirements for both schemes.