What is LISTO?
Low Income Super Tax Offset (LISTO) is a government payment that refunds some of the tax on superannuation for workers falling within the first and second tax brackets.
Tax brackets, eligible for LISTO
| Income thresholds | Rate |
|---|---|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 16% |
The LISTO payment is up to 15% of the concessional (before tax) super contributions you or your employer pay into your super fund up. The LISTO scheme was created to make superannuation fairer for low-income workers – most Australians pay lower taxes on their super than on their salary.
Why does LISTO matter?
Without LISTO, many low-income earners would be taxed at 15% on their super contributions, which could be higher than their marginal income tax rate, especially for those earning under $37,000. In other words, workers would pay more tax on their super than on their work income.
The lower tax rate on super rewards us for not having the access to our super until retirement. It’s only fair that the lower paid workers get the same benefit, facilitated by LISTO.
Why does LISTO need an update?
While prices, wages, tax brackets and superannuation guarantees went up, LISTO has remained frozen since 2012.
When LISTO was introduced 13 years ago, the second tax bracket amounted to $37,000. It was raised to $45,000 in 2020. This means that low-income earners who earn more than $37,000 get no LISTO payments.
Moreover, the LISTO payment cap has stayed at $500 per year, which is based off a 2012 superannuation guarantee of 9%. The super guarantee has increased since then and is now at 12%. Hence, LISTO doesn’t fully offset tax for LISTO recipients earning more than $27,778.
Because LISTO’s payment cap and the threshold have not shifted for 13 years, 1.3 million workers are missing out on part of their super – 60% of them are women.
What will the government do to fix it?
From 1 July 2027, the LISTO threshold will rise from $37,000 to $45,000 (to align with the high end of second tax bracket). The maximum LISTO payment will increase to $810 per year.
Moreover, as part of a tax cut legislated in 2025, from 1 July 2026, the government will reduce the income tax rate for people earning under $45,000 to 15%, and then to 14% from 1 July 2027.
LISTO now vs LISTO in 2027
| Policy | LISTO now | LISTO in 2027 |
|---|---|---|
| Income threshold | $37,000 | $45,000 |
| Maximum LISTO payment | $500 | $810 |
This means that by 2027, when the final tax cut kicks in, workers eligible for LISTO will effectively pay no tax on their super contributions.
According to Super Members Council, these proposed changes to LISTO would boost retirement savings for 1.3 million low-income workers – most importantly women and young Australians. Some lower paid workers would retire with up to $60,000 more in their super accounts.
This will make the Superannuation and tax treatment more equal and encourage retirement savings.
In March 2026, the changes to LISTO were passed by Parliament and became law. The SDA Union has supported the legislation as we understand how important superannuation is for our workers in the long run.
You can find out more about superannuation below: