LISTO update makes super tax settings fairer for working Australians

Rest, one of Australia’s largest profit-to-member superannuation funds, says the Australian Government’s proposed changes to the Low Income Super Tax Offset (LISTO) will make super tax arrangements fairer for lower-income workers, particularly women and those in part-time and casual roles.

Rest’s Chief Strategy Officer, Tyrone O’Neill, says the updates to the LISTO will ensure it fulfils its original purpose: preventing low-income earners from paying more tax on their super than on their wages.

“The LISTO is a critical measure for hundreds of thousands of Rest’s 2 million members. Nearly half a million Rest members receive it every year, including around 300,000 women,” says Mr O’Neill.

“But because the LISTO threshold hasn’t kept pace with super guarantee and income tax settings, countless more members have been missing out on the benefits and have been paying more tax on their super than they do on their take-home pay.

“This is inequitable, especially for women at the stages of life when they are more likely to reduce work hours or take time out to care for children.

“We know from modelling by the Super Members Council that these changes could make a significant difference. Some lifetime low-paid workers could have up to $60,000 more in their super savings by retirement.¹

“These changes were one of Rest’s top recommendations in our 2025-26 Pre-Budget Submission. We congratulate the Government for committing to changes that will make the super tax settings fairer and more equitable for working Australians.”

Updating the LISTO has widespread support among Rest members. A survey conducted earlier this year found 77% of Rest members support raising the LISTO so it’s fairer for low income workers.²

The Government has announced the income threshold for LISTO will be raised from $37,000 to $45,000, and the annual LISTO cap will be increased from $500 to $810 from 1 July 2027. These changes are aligned with Rest’s recommendation.