Despite the financial safety measures introduced by the Government to manage the impact COVID-19 is having on the economy, there will still be many people earning substantially less than usual. Workers who have seen a reduction in their salary or have recently lost their job may be eligible for the government’s low-income super contribution.
What is LISTO?
The low-income super tax offset (LISTO) is an Australian Government initiative whereby the Government contribute up to $500 a year into low income earners superannuation accounts to help boost their retirement savings.
For some $500 might not sound like much, but over time with the magic of compound interest a $500 tax offset today could be worth much more over four or five decades. The longer between today and retirement, the more your savings will benefit (subject to market activity). To see the impact this can have on your retirement savings try our Supermodeller calculator.
You don’t need to do anything to claim the offset. It’s automatically applied to those who are eligible when they lodge their tax return – providing they have provided the super fund with their tax file number.
LISTO is 15% of the concessional contributions (before-tax) contributions you or your employers pays into your super account.
Am I eligible?
To be eligible for the LISTO:
- You or your employer must have made concessional (before-tax) contributions for the financial year of income into your super account
- Your annual income is $37,000 or less – to work out eligibility, the Australian Tax Office (ATO) uses your actual or adjusted taxable income
- you must not have held a temporary resident visa during the relevant financial year, and
- you lodge a tax return and must satisfy an income test in which 10% or more of your total income is derived from business or employment.
To find out more, visit the ATO’s website.
If you want to understand more about the impact of COVID-19 and superannuation visit our dedicated COVID-19 page.
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