Super contributions tax concessions
Low income superannuation tax offset (LISTO)
The low income superannuation tax offset (LISTO) replaces the Low Income Superannuation Tax Contribution (LISC) for concessional contributions made from 1 July 2017.
LISTO essentially continues the same concession as LISC, which seeks to return the 15% tax paid on concessional contributions, if the individual is a low income earner with adjusted taxable income of $37,000 or less.
The maximum Government contribution under LISTO is $500 (not indexed). So the maximum amount of concessional contributions that may benefit from LISTO in a financial year is $3,333.33 (ie 15% of $3,333.33 = $500). The amount of LISTO payable cannot be less than $10 (if an amount is payable).
Not an offset
LISTO is not a tax offset within the meaning of the income tax law. The name instead reflects the operation of the payment in offsetting the tax detriment that eligible low income earners would otherwise face as a result of the flat rate of tax on concessional contributions being in excess of their effective tax rate.
How LISTO is paid
LISTO offset will normally be paid to a superannuation account of an individual, but can be paid in other ways. For example, it can be paid to the individual directly, if they have no eligible superannuation account and have retired, or to the individual's estate if they have passed away.
Adjusted taxable income
Adjusted taxable income for LISTO is calculated as:
+ adjusted fringe benefits
+ target foreign income
+ total net investments loss
+ tax-free pensions or benefits
+reportable superannuation contributions
- any deductible child maintenance expenditure for that year
There is no taper of adjusted taxable income. Individuals who have an adjusted taxable income of more than $37,000 will not be eligible for LISTO.
LISTO applies to concessional contributions
The LISC/LISTO applies to concessional contributions and is a different payment from the Government co-contribution (which applies to personal non-concessional contributions). Examples of concessional contributions that will be eligible include:
- superannuation guarantee contributions
- notional taxed contributions
- personal tax-deductible contributions
- allocations from reserves that are concessional contributions; and
- contributions an employer makes under a salary sacrifice arrangement.
Eligibility for LISTO
A person may be entitled to LISTO for concessional contributions made on or after 1 July 2017 if the individual:
- has adjusted taxable income that does not exceed $37,000
- has at least one concessional contribution made by or for them in the corresponding financial the year
- is not a holder of a temporary resident visa (New Zealand citizens in Australia do not hold a temporary resident visa and are as such, eligible for the payment)
- has at least 10% of more of their total income is derived from the individual carrying on a business or engaging in activities where they are treated as an employee for Superannuation Guarantee purposes; or
- 12 months after the end of the income year the Commissioner reasonably believes there is insufficient information to determine the taxpayer's adjusted taxable income and estimates it does not exceed $37,000 and at least 10 per cent of the individual's income for the income year is from employment.
When an individual does not lodge an income tax return (eg if an individual is under the tax-free threshold), the ATO will determine eligibility for the LISTO based on information available to the ATO. This could include information already held within the ATO which has been collected for other purposes.
The LISTO will only apply for amounts of an individual's concessional contributions that are included in the assessable income of a superannuation fund. Therefore, concessional contributions to constitutionally protected funds or unfunded defined benefit interests are not eligible for LISTO since these concessional contributions are not subject to contributions tax.
Last modified: Tuesday, July 23, 2019