Understanding LISTO and What’s Changing
The Low Income Superannuation Tax Offset (LISTO) exists so that low-income earners don’t pay more tax on their super contributions than on their wages. Currently: earnings under $37,000 qualify, with a maximum offset of $500. (treasury.gov.au)
What’s New from 1 July 2027
- Eligibility will extend to incomes up to $45,000 — this matches the second income tax bracket. (treasury.gov.au)
- Maximum offset payment increases from $500 to $810. (treasury.gov.au)
- Number of eligible individuals rises to 3.1 million, up from roughly 1.8 million under old rules. (ministers.treasury.gov.au)
Who Benefits Most?
- Low-earners, particularly those in casual, part-time, or insecure work. Many currently outside eligibility will now receive benefits.
- Women, who are overrepresented in lower paid sectors. Around 60% of those gaining benefit are expected to be women. (ministers.treasury.gov.au)
- Young workers, since compounding works more significantly over a longer horizon.
Calculating the Impact: Example
| Scenario | Income | Current LISTO | New LISTO from 2027 | Difference |
|---|---|---|---|---|
| Retail worker earning $35,000/year | $35,000 | $500 | $810 | +$310 annually |
| Cleaner earning $40,000/year | $40,000 | $0 (ineligible) | $810 | +$810 annually |
| Nurse on $55,000/year | $55,000 | $0 | $0 | No change |
Over a 40-year career, the accumulating effect of even a few hundred dollars extra per year in super can mean thousands more in retirement savings.
What Low-Income Workers Should Do Now
- Check your estimated income for 2026-27, to understand if you’ll qualify under the new threshold.
- Ensure all employer super contributions are being paid correctly, especially under the new Payday Super rules (from 1 July 2026).
- Keep good records of your income and super contributions; differences can be applied through tax returns or via super fund queries.
- Speak to your super fund about how they’ll implement LISTO increases, so you know when and how the benefits apply.
Summary
These changes to LISTO reflect long-delayed adjustments to inflation, tax brackets, and fairness. For many Australians earning under $45,000, this could be one of the most meaningful super changes in years—leading to better retirement outcomes and greater equity in the system.