The Government will introduce a Low income superannuation tax offset (LISTO) to replace the low income superannuation contribution. Individuals with an adjusted taxable income of up to $37,000 will receive a refund into their superannuation account of the tax paid on their concessional superannuation contributions up to a cap of $500. The ATO will determine a person’s eligibility for LISTO and this will be paid into the person’s superannuation account.
Summary of new law
Concessional contributions are generally contributions to a superannuation fund that receives concessional tax treatment. Concessional contributions are generally ‘before tax’ contributions that include an employer’s superannuation guarantee contributions, contributions made under a salary sacrifice arrangement and an individual’s personal contributions that are deducted.
- The low income superannuation tax offset seeks to effectively return the tax paid on concessional contributions by an individual’s superannuation fund or retirement savings account provider to the person, if the individual is a low income earner up to a maximum capped amount. Low income earners are defined as individuals with an adjusted taxable income of $37,000 or less.
- The maximum amount payable is $500 per year for each eligible individual.