Unlock Your Savings: Low Income Superannuation Tax Offset (LISTO) Explained
- Feb 4
- 9 min read
The Low Income Superannuation Tax Offset, or LISTO as it's often called, is a government payment designed to refund the 15% tax paid on concessional super contributions for low-income earners. It's an automatic payment of up to $500 annually that helps ensure retirement savings aren't unfairly reduced by superannuation taxes. The Australian Taxation Office (ATO) handles the entire process, so eligible individuals don't need to apply.
This article is based on the Current Financial Year at the time of writing.
At Baron Tax & Accounting, we've observed that the LISTO payment often comes as a welcome surprise for clients who aren't aware it exists, particularly students and part-time workers across Brisbane with multiple casual jobs. Because their income from any single employer is low, they don't realise their combined super contributions make them eligible for this automatic government top-up, which quietly appears in their super account.
What is the Purpose of LISTO?
At its core, the Low Income Superannuation Tax Offset is about fairness in the superannuation system. In Australia, concessional super contributions, such as those made by your employer under the Superannuation Guarantee, are typically taxed at a flat rate of 15% within the super fund.
For a high-income earner, this 15% tax is significantly lower than their personal marginal tax rate. However, for workers on lower incomes, this 15% can be the same as, or even higher than, the tax rate they pay on their take-home salary. This creates an imbalance where low-income earners are effectively penalised for saving for retirement.
LISTO corrects this by refunding the tax paid on these super contributions—up to a maximum of $500 each financial year—directly into the individual's super account. This ensures low-income workers are not unfairly disadvantaged and provides a valuable boost to their retirement savings.
How Does It Work in Practice?
The entire LISTO process is managed automatically by the Australian Taxation Office (ATO). You do not need to fill out any forms or apply for it. After you lodge your annual income tax return, the ATO assesses your eligibility based on the information provided.
Here is a simple flow of the process:
Step 1: You lodge your tax return
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Step 2: ATO automatically assesses eligibility (income < $37k, etc.)
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Step 3: ATO calculates LISTO payment (15% of concessional contributions, capped at $500)
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Step 4: Payment is sent directly to one of your super fundsThis streamlined system is designed to support the retirement savings of those who need it most without creating additional administrative work for them.
Who is Eligible for the LISTO Payment?
The ATO automatically determines your eligibility when you lodge your tax return, but understanding the criteria can help you know if you are likely to benefit. The assessment covers your income, work status, and the type of super contributions made during the financial year.
The primary condition is your income. To be eligible, your adjusted taxable income (ATI) must be $37,000 or less. Your ATI is not just your salary; the ATO calculates it by taking your taxable income and adding items like reportable fringe benefits, reportable super contributions, and certain tax-free pensions.
Core Eligibility Checklist
While the income threshold is the main factor, several other conditions must be met. Here is a practical checklist to see if you qualify:
You've Had Super Paid: You or your employer made concessional (before-tax) contributions to your super fund. This typically includes the compulsory Superannuation Guarantee payments.
You've Lodged a Tax Return: This is essential. The ATO cannot assess your eligibility without the information from your lodged tax return.
You Earn 'Work' Income: At least 10% of your total income must come from employment or carrying on a business.
You're an Australian Resident: You must not have held a temporary resident visa at any time during the financial year (exceptions apply for New Zealand citizens and holders of specific prescribed visas).
Understanding concessional contributions is important. If you choose to contribute extra to your super from your pre-tax pay through salary sacrificing, those contributions also count. You can learn more in our guides on salary sacrifice benefits and how to salary sacrifice super.
A Practical Brisbane Example
Let's consider a university student in Brisbane who works two part-time jobs: one at a café in the city and another at a retail store in Sunnybank.
Neither job provides a high income individually. However, her combined adjusted taxable income for the year is $32,000. Throughout the year, her employers contributed a total of $3,360 in Superannuation Guarantee payments to her fund. Because her income is under the $37,000 threshold and she meets all other criteria, the ATO will automatically calculate and pay a LISTO amount directly into her super account after she lodges her tax return.
This scenario is a common example of how the LISTO system supports individuals who are starting their careers or working multiple part-time jobs.
How the ATO Calculates Your LISTO Payment
A key advantage of the Low Income Superannuation Tax Offset is that you do not need to calculate it yourself. The ATO performs the calculation automatically after you lodge your income tax return.
The process is straightforward. The ATO looks at the total concessional superannuation contributions made to your super account during the financial year. For most people, this is primarily the Superannuation Guarantee payments made by their employer.
Your LISTO payment is calculated as 15% of these total concessional contributions. This formula is designed to effectively refund the 15% contributions tax paid by your super fund.
The Maximum Payment and How It Applies
There is a limit on the amount of LISTO you can receive in one financial year. The maximum payment is capped at $500.
If 15% of your concessional contributions exceeds $500, your payment will be limited to this maximum amount. To reach the $500 cap, you would need to have approximately $3,334 in concessional contributions made during the year. It's important to distinguish these from non-concessional contributions, which are made from your after-tax income. Be mindful of the concessional contributions cap, which sets a limit on the total before-tax contributions you can make each year.
The automated process follows these steps:
You Lodge Your Tax Return: This initiates the assessment.
ATO Checks Eligibility: The system verifies your ATI is $37,000 or less and you meet other criteria.
ATO Totals Contributions: All concessional contributions for the year are summed up.
ATO Calculates Payment: The system applies the 15% calculation.
Payment is Capped: If the result is over $500, it is reduced to $500.
Payment is Made: The final amount is transferred directly to your super fund.
LISTO Calculation Examples
This table illustrates how the LISTO payment is calculated for different income and contribution scenarios.
Scenario | Adjusted Taxable Income (ATI) | Concessional Contributions | Calculation (15% of Contributions) | Final LISTO Paid |
|---|---|---|---|---|
Retail Worker | $25,000 | $2,625 | $2,625 x 15% = $393.75 | $393.75 |
Apprentice | $35,000 | $3,675 | $3,675 x 15% = $551.25 | $500.00 (Capped) |
Casual Worker | $21,000 | $2,205 | $2,205 x 15% = $330.75 | $330.75 |
As shown, the Apprentice receives the maximum $500 because 15% of their contributions exceeds the cap. The Retail and Casual Workers receive the full 15% refund based on their specific contribution amounts.
How to Check for Your LISTO Payment
Because the Low Income Superannuation Tax Offset is paid automatically, many recipients are unaware they have received it. The payment does not appear on your tax return summary or Notice of Assessment. Instead, the funds are sent directly to your super fund.
To confirm you have received a LISTO payment, you need to check your superannuation records, not your tax documents. The two most effective places to look are your annual superannuation statement or your myGov account linked to ATO online services.
Checking Your Superannuation Statement
Your super fund must provide you with a statement at least once a year. This document details all account activity, including employer contributions, fees, investment earnings, and any government payments.
When reviewing your statement's transaction list, look for a government contribution. The description can vary between funds but is usually clearly labelled.
Common descriptions include:
Government co-contribution (some funds group LISTO here)
Low Income Super Tax Offset
LISTO payment
ATO Super payment
The amount should be equal to 15% of your concessional contributions for the year, up to the $500 cap. If you need clarification on any transaction, contact your super fund's member services team. For more guidance on reviewing your records, see our guide on how to check your super balance.
Using myGov to Track Your Payment
Your myGov account provides the most direct way to view transactions reported to the ATO. By linking your ATO online services, you can access a detailed history for all your super accounts.
Follow these steps to check for a LISTO payment:
Log in to your myGov account.
Navigate to your linked Australian Taxation Office services.
Select the 'Super' tab from the main menu.
Go to 'Manage' and then click on 'Transaction list'.
This section displays all contributions and payments made to your super funds. A LISTO payment will be listed as a government contribution, allowing you to verify the payment date and amount. This is particularly useful for people in cities like Brisbane who may have multiple super funds from different jobs.
Summary: Key Takeaways on LISTO
The Low Income Superannuation Tax Offset (LISTO) is a government initiative designed to create a fairer superannuation system for low-income earners. It effectively refunds the 15% tax on compulsory super contributions, ensuring these individuals are not taxed on their super at a rate higher than their income tax rate.
While some tax strategies focus on specific investments, such as property investment tax benefits, LISTO provides a direct and automatic boost to retirement savings for those who need it most.
Key points to remember:
Income Threshold: Your adjusted taxable income must be $37,000 or less to be eligible.
Payment Amount: You receive 15% of your before-tax super contributions back, capped at $500 per year.
Automatic Process: The ATO handles everything automatically after you lodge your tax return. No application is necessary.
Eligibility Rules: You must have had super contributions made, earn at least 10% of your income from work or a business, and meet residency requirements.
LISTO acts as a quiet but effective mechanism for growing your super balance, especially valuable for part-time and casual workers across Australia. The easiest way to confirm you've received it is by checking your annual superannuation statement.
Frequently Asked Questions (FAQs)
Do I need to apply for the LISTO payment?
No, you do not need to apply. The process is fully automated by the Australian Taxation Office (ATO). After you lodge your income tax return, the ATO assesses your eligibility based on your income and superannuation contribution data. If you qualify, the payment is automatically calculated and sent to your super fund.
What happens if I have more than one super fund?
Having multiple super funds does not prevent you from receiving a LISTO payment. The ATO considers your total income and the combined concessional contributions across all your funds. When making the payment, the ATO will deposit the entire amount into a single super fund, typically one that received contributions for you during that financial year.
Does the LISTO payment affect my Centrelink benefits?
Generally, no. The LISTO payment is made directly to your superannuation fund, which is preserved for retirement. As it is not accessible as regular income, it should not affect your eligibility for Centrelink payments. However, your total super balance is assessed under the assets test once you reach Age Pension age. For advice specific to your circumstances, it is always best to contact Services Australia directly.
Is LISTO the same as the Low Income Tax Offset (LITO)?
No, they are two different offsets.
LISTO (Low Income Superannuation Tax Offset): This is a payment made to your super fund to refund the 15% tax on super contributions. It boosts your retirement savings.
LITO (Low Income Tax Offset): This is an offset that reduces the amount of income tax you pay. It lowers your tax bill on your personal tax return. It is possible to be eligible for both offsets in the same year.
Where does the LISTO money go?
The LISTO payment is sent directly to one of your superannuation funds by the ATO. It is not paid into your personal bank account or provided as a cash refund. You can verify the payment by checking your super fund's annual statement or through your myGov account linked to the ATO.
Need clarity on your situation?
The information provided in this article is general in nature and serves as an educational guide on the Low Income Superannuation Tax Offset. Tax laws and superannuation rules are complex and subject to change, and individual circumstances can significantly affect outcomes.
To ensure you receive all entitlements and meet your obligations, seeking personalised advice from a qualified tax professional is recommended. An advisor can review your specific financial situation and provide guidance tailored to your needs.
ATO Official Guidance Reference
For further details directly from the source, please refer to the Australian Taxation Office's official page on the topic:
Low income super tax offset (ATO)
Baron Tax & Accounting
Website: https://www.baronaccounting.com
Email: info@baronaccounting.com
Phone: +61 1300 087 213
Whatsapp: 0450 468 318
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