LISTO changes 'will help address gender super gap'

Superannuation fund HESTA has welcomed an announcement from the Federal Government that will boost the retirement outcomes of more than a million workers on low incomes.

From mid-2027, the income threshold for receiving the Low-Income Super Tax Offset (LISTO) will be raised, along with the payment.

Anyone currently earning up to $37,000 a year, who also meets other eligibility criteria, may receive a LISTO contribution to their superannuation of up to $500 a year from the Federal Government.

From 1 July 2027, the LISTO will extend to people earning up to $45,000 and the offset will also be lifted so that it matches the current mandatory super payment level, increasing the maximum to $810.

HESTA CEO Debby Blakey said the changes would ensure no working Australian paid more tax on their super contributions than on their take-home pay.

"For many years, HESTA and others in the sector have passionately advocated for this reform, which is a significant step forward in addressing the gender super gap that still sees women retire on average with around 25 percent less super than men," Ms Blakey said.

"The LISTO is the only tax concession more likely to be paid to women than men, as they tend to have lower incomes than men and face higher effective marginal tax rates than men."

Ms Blakey said women represented nearly 80 percent of HESTA's more than one million members.

"Many of whom work in typically lower-paid sectors such as aged care and early childhood education and take time out of the paid workforce to care for others," she said.

"In FY24, around 130,000 HESTA members received a LISTO payment, but more than 70,000 members earning between $37,000-$45,000 missed out on $35 million in super contribution 'refunds' because of the LISTO misalignment with tax brackets.

"Lifting the LISTO eligibility and payment amount will help ensure more than a million low-income earners can build a more secure retirement and help create a fairer super system."

The adjustments could add an extra $60,000 at retirement for some workers.

"Dignity in retirement should be for everyone, and HESTA is committed to keep advocating for change that will help improve our members' financial security in retirement," Ms Blakey said.

To be eligible for the LISTO, you must meet all the following requirements:

• You or your employer pays concessional (before-tax) super contributions (including super guarantee amounts) for the year to a complying super fund

• You earn $37,000 or less a year (from 1 July 2027, $45,000 or less a year); to work out your eligibility, the ATO uses your actual or estimated adjusted taxable income – log in to your myGov account to check your taxable income

• You have not held a temporary resident visa at any time during the income year (Note: New Zealand citizens in Australia are eligible for the payment)

• You lodge a tax return and 10 percent or more of your total income is from business and/or employment, or you don't lodge a tax return and 10 percent or more of your total income is from your employment.

• HESTA is APHA's Diamond Sponsor.

Read more: HESTA – Super's gender 'blind spot' needs addressing'

Read more: HESTA – New role to help maximise member returns

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