Understanding the New $810 LISTO: A Super Boost for Low-Income Earners

Australia's superannuation framework is anchored by compulsory employer contributions, yet the uniform 15% tax applied to concessional contributions has long presented an equity challenge for lower-income workers [1]. Without targeted adjustments, individuals on modest incomes often face a tax rate on their retirement savings that matches or exceeds their personal marginal income tax rate. To correct this structural imbalance, the Low Income Superannuation Tax Offset (LISTO) functions as a direct government refund of contributions tax into member accounts [1]. Following legislative expansion under the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026, the maximum annual LISTO rebate is legislated to lift from $500 to $810 starting from 1 July 2027, while remaining capped at $500 for the 2026–27 financial year [2].

How the Expanded LISTO Operates

Concessional superannuation contributions—comprising compulsory employer Superannuation Guarantee (SG) payments, salary sacrifice arrangements, and tax-deductible personal contributions—are normally subject to 15% contributions tax inside a complying super fund [1]. The Superannuation Guarantee rate is legislated at 12% [3]. Under the legislated reforms, the LISTO eligibility threshold will increase from $37,000 to $45,000 from 1 July 2027 to align with the upper limit of the second income tax bracket, though the threshold remains $37,000 for the 2026–27 year [2].

Currently calculated as 15% of concessional contributions up to $500 (for those earning up to $37,000), the offset will, starting 1 July 2027, cover 15% of contributions up to $810, meaning an employee earning $45,000 who receives $5,400 in 12% SG contributions will have their entire $810 contributions tax refunded [1]. This mechanism effectively reduces the net contributions tax for eligible low-income earners to zero percent.

Who Qualifies and Cohorts That Benefit

The revised scheme will bring the total number of eligible Australian workers to around 3.1 million once operational, with approximately 1.3 million workers receiving a new or increased super boost [4]. Key demographics benefiting from the lift include casual employees, part-time professionals, second earners in dual-income families, and parents returning from career breaks.

• Income threshold criteria: Adjusted taxable income must not exceed $37,000 for the 2026–27 income year (rising to $45,000 from 1 July 2027) [2].
• Employment income test: At least 10% of total income must be derived from business activities, employment, or a combination of both [1].
• Residency restrictions: Individuals must not have held a temporary resident visa at any stage during the income year, although New Zealand citizens residing in Australia remain eligible [1].

Stacking Strategies: Combining LISTO with Super Incentives

While LISTO operates automatically on pre-tax employer contributions, savers can accelerate early retirement balance growth by pairing LISTO with complementary government incentives and voluntary contribution strategies.

The primary mechanisms available to combine alongside LISTO include:

• Government Super Co-Contribution: Eligible individuals who earn $49,293 or less in 2026–27 and contribute personal after-tax (non-concessional) money receive 50 cents for every dollar contributed, up to a maximum co-contribution of $500 for a $1,000 personal contribution [5]. The entitlement gradually phases out, cutting out completely at $64,293 [2].
• Spouse Contribution Tax Offset: If a member's spouse contributes up to $3,000 after-tax directly into the lower-earner's super fund, the contributing spouse can claim an 18% tax offset of up to $540 on their own income tax return, provided the receiving spouse has an income of $37,000 or less (phasing out at $40,000) [6].

By coordinating employer SG payments (which generate up to $500 in LISTO for 2026–27, rising to $810 from 1 July 2027), a personal $1,000 non-concessional contribution (earning a $500 co-contribution), and a $3,000 spouse contribution (securing a $540 tax offset for the contributing partner), lower-income households can substantially accelerate capital accumulation without facing onerous tax leakages [2], [5], [6].

The legislated expansion of LISTO to $810 from 1 July 2027 levels the playing field for part-time and lower-income workers, ensuring their mandatory retirement contributions compound entirely tax-free within the fund. To ensure entitlement payments are successfully received, members should verify that their superannuation fund has their correct Tax File Number on file, allowing the ATO to credit the offset seamlessly upon the processing of annual income tax lodgements [1].

Sources

• [1] Australian Taxation Office, 'Low income super tax offset', https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/low-income-super-tax-offset
• [2] Australian Taxation Office, 'Government contributions', https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/government-contributions
• [3] Australian Taxation Office, 'Super guarantee', https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/super-guarantee
• [4] The Treasury, 'Reforms to support low-income workers and build a stronger super system', https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/reforms-support-low-income-workers-and-build-stronger-super-system
• [5] Australian Taxation Office, 'Super co-contribution', https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/super-co-contribution
• [6] Australian Taxation Office, 'Spouse super contributions', https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/spouse-super-contributions

This article contains general educational information only and does not constitute personal financial, legal, or tax advice. Please consult a licensed professional before making any financial decisions.