The Federal Government has renewed its superannuation reform agenda, pairing high-balance tax changes with measures aimed at improving outcomes for lower-income earners. Recent reporting highlights proposed adjustments to the Low Income Super Tax Offset (LISTO), designed to enable workers on modest incomes to build their retirement savings.
For workers reviewing their entitlements with an experienced accountant Box Hill, understanding how LISTO operates is increasingly important.
What Is LISTO?
The Low Income Super Tax Offset is designed to refund contributions tax paid on concessional (before-tax) super contributions for eligible low-income earners.
Under the existing structure:
- Eligible individuals can receive a refund of up to $500.
- The offset applies to those earning up to $37,000 annually.
- The ATO calculates and pays the amount automatically into the individual’s super account.
The policy intent is straightforward: without LISTO, someone earning below the tax-free threshold could effectively pay more tax on their super contributions (15%) than on their personal income.
Recent super tax reform proposes adjustments to thresholds to ensure the measure continues to reflect wage growth and fairness principles.
Why It Matters for Low-Income Workers
It is estimated that more than one million Australians could benefit from refinements to low-income super settings.
Those most likely to be affected include:
- Part-time and casual workers
- Young employees entering the workforce
- Workers in hospitality, retail and care sectors
- Individuals returning from parental leave
Even relatively small annual offsets can compound meaningfully over decades due to investment earnings inside super.
What Should You Check?
Although LISTO is applied automatically, practical compliance matters:
- Is your employer paying super correctly and on time?
The ATO provides updated employer key dates and obligations for 2026, including super guarantee payment timing. - Is your income correctly reported?
LISTO eligibility is assessed based on taxable income. - Are your super details linked correctly to your TFN?
Mismatches can delay payments.
A qualified Box Hill accountant can help review PAYG summaries, income thresholds, and super contribution records to ensure eligibility is not missed.
The Broader Policy Context
Treasury has framed these changes as part of a broader effort to rebalance super concessions across income levels. While higher-balance reforms dominate headlines, measures such as LISTO adjustments reinforce the system’s equity objectives.
For low-income earners, the reform conversation is less about additional taxes and more about preserving retirement savings growth.
Final Thoughts
Superannuation policy is evolving at both ends of the balance spectrum. While Division 296 targets very large accounts, LISTO adjustments aim to protect those with modest earnings.
The key takeaway is simple: even if you earn below $37,000 or $45,000 after 1 July 2027, your super deserves attention. Small annual credits can deliver long-term benefits.
At Infinity Solution Tax Plus, a trusted accountant in Box Hill can assist with reviewing super entitlements, checking employer compliance, and ensuring your retirement savings strategy aligns with current policy settings.
Disclaimer: This article contains general information only and does not constitute financial or taxation advice. You should seek personalised advice from a registered tax or financial professional.
Infinity Solution Tax Plus 