While the calendars have flipped to 2026 and Parliament is set to crank back into gear, there has been no slowing down to the pace of superannuation policy reform.
That brings us to the Low‑Income Super Tax Offset (LISTO). Earlier this month, we finalised our submission to the Government’s Better Targeted Superannuation Concessions exposure draft legislation.
Last October, the Government committed to unfreezing the LISTO for the first time in 13 years. This was an important fairness fix many of us had been advocating for years. It will lift the income threshold for eligibility from $37,000 to $45,000 and boost the maximum rebate from $500 to $810 — benefiting around 1.3 million low‑paid workers, most of them women.
Our modelling shows that properly boosting and maintaining the LISTO could mean up to $60,000 more in retirement savings for some lifetime low‑paid workers. That’s a meaningful difference, especially for younger workers, part‑time parents, and people in sectors like care, retail, hospitality and health.
But unfreezing the LISTO is only half the job. The real test is ensuring the benefits of this reform are felt for generations.
Without automatic indexation, our modelling shows more than 30 per cent of the increase in the LISTO payment would be eroded within five years, and around 445,000 fewer Australians would remain eligible as wages and tax thresholds move. In other words, the value of this long‑overdue fix would steadily melt away.
Indexing both the payment amount and the eligibility threshold is the common‑sense solution. It protects low‑income workers from inflation and ensures the system treats the lowest‑paid Australians with the same fairness already extended to much higher earners.
The LISTO exists for a simple reason: people on low incomes should not pay more tax on their super than on their take‑home pay. Yet for years, that’s exactly what’s happened. Our research shows 1.3 million workers missed out on $3 billion since 2020 alone because the LISTO was frozen — with women making up around 60 per cent of those affected.
So, one message should be clear: fixing the LISTO is good policy, but let’s not have to fix it again in the future.
