For Australians on low and middle incomes, maximizing superannuation contributions can be a powerful way to grow retirement savings—and the government is offering incentives to make it easier. Eligible workers could boost their super by up to $1,000 each year through two key programs: the Low Income Super Tax Offset (LISTO) and the Super Co-Contribution Scheme.
Here’s how these programs work and how you can take advantage of them.
Table of Contents
1. Low Income Super Tax Offset (LISTO): $500 Boost
The Low Income Super Tax Offset (LISTO) is designed to support workers earning $37,000 or less annually. Without this offset, low-income earners might pay more tax on their super contributions than on their regular income—a situation LISTO aims to fix.
- How It Works: LISTO refunds up to 15% of concessional (before-tax) super contributions made by an individual or their employer, capped at $500 annually.
- Eligibility:
- Earn less than $37,000 per year.
- Register your Tax File Number (TFN) with your super fund.
- How to Claim: LISTO payments are automatically calculated and deposited into your super account once your eligibility is confirmed.
2. Super Co-Contribution Scheme: Up to $500 in Matching Payments
For those willing to contribute a bit more out of pocket, the Super Co-Contribution Scheme offers a dollar-for-dollar incentive.
- How It Works: The government matches 50 cents for every $1 you contribute after tax, up to a maximum of $500 annually.
- Eligibility:
- Earn less than $60,400 during the financial year (threshold increases annually; for FY2024-2025, it’s $60,400).
- Make after-tax contributions to your super fund.
- Be under 71 years old at the end of the financial year.
- Meet the ATO’s income eligibility test, which considers total income minus allowable deductions.
- Example: If your income is at or below the lower threshold, and you contribute $1,000 of after-tax income, the government will add $500 to your super. Contributions phase out as income approaches the higher threshold.
$750 Centrelink Cash Relief Payment: Fact or Fiction? Here’s the Truth
WA Households to Receive $350 Cost of Living Boost: Here’s What You Need to Know
New Year Boost: Over 1 Million Australians to See Welfare Payments Rise in 2025
$255 Cost of Living Concession Payment 2024: Essential Support for Low-Income Households
What Centrelink Payments are Increasing in 2025 and How it Benefits Australians
Why These Programs Matter
Both LISTO and the Co-Contribution Scheme are tools to level the playing field for lower-income workers. They provide opportunities to grow super balances significantly without large out-of-pocket costs.
For example, a worker earning $35,000 could receive:
- $500 from LISTO via employer contributions.
- Up to $500 in co-contributions by adding their own after-tax payments to their super fund.
This means an additional $1,000 per year, directly enhancing their retirement savings.
Steps to Boost Your Super
- Check Eligibility: Review your income and super contributions to confirm if you qualify for LISTO or co-contributions.
- Register Your TFN: Ensure your super fund has your Tax File Number to enable automatic LISTO payments.
- Make Voluntary Contributions: If you can, deposit after-tax contributions to your super to maximize government co-contributions.
- Track Payments: Use your myGov account linked to the Australian Tax Office to monitor contributions and payments into your super.
Supercharging Your Future
With a little effort and planning, these government initiatives can help low and middle-income Australians build stronger superannuation balances for a more secure retirement. Whether you’re just starting your career or looking for ways to optimize your savings, taking advantage of these programs could make a significant difference over time.
Start now to secure your financial future—and make every dollar count.
Leave a Reply