Income super tax offset, Australia’s low-income, for low-income earners in Australia saving for your retirement can feel daunting and difficult. Thankfully, the federal government has some programs to help you prepare, such as the Low-Income Super Tax Offset (LISTO).

What does the Low-Income Super Tax Offset Program Offer?

The Low-Income Super Tax Offset is a program run by the federal government to assist low income earners with saving for their retirement.

If you earn $37,000 or less a year the government will make a payment of up to $500 straight into your super fund.

Criteria to Be Eligible for The Low-Income Super Tax Offset

To be eligible to receive the LISTO payment from the federal government you must meet all of the following criteria to receive the payment.

  • Your employer (or yourself if you are self-employed) pay concessional (pre-tax) superannuation contributions into a complying super fund. This includes your guaranteed super amount most people are paid as part of their wages (the 9.5 percent of compulsory super required to be paid by most employers).
  • You earned $37,000 or less in the financial year based on your adjusted taxable income.
  • You did not hold a temporary resident visa during the financial year (New Zealand citizens are eligible for the payment).
  • A minimum of 10 percent of your total income comes from employment or business,
  • Your super fund has your Tax File Number (TFN).

How much will you receive?

The amount of Low-Income Super Tax Offset the federal government puts into your super account depends on each person’s individual living scenario.

The LISTO is calculated at 15% of the pre-tax (concessional) super contributions paid into your super fund by you or your employer.

This means that if you qualify the maximum payment you can receive is $500 and the minimum is $10. If you fall below $10, the government will just round up to $10.

How Do I Get My Low-Income Tax Super Offset Payment?

It’s easy, the federal government will organise it for you. Firstly, the most important part is to make sure your super fund has your tax file number or you could miss out on the payment.

After you lodge a tax return, your LISTO is an automatic payment which is paid directly into your super fund.

If you are yet to lodge your tax return, then you will still receive the payment. However, your eligibility is determined from the information that can be collected about you from your super fund and other ATO information.

Other tips to help low income earners plan for a better retirement

Even if you are a low-income earner there are still plenty of steps you can take to prepare for retirement. In addition to the LISTO program, the Australian Government also has a program called the Government Super Co-Contribution Scheme.

This scheme is an incentive for low to middle income earners to make voluntary (post-tax) contributions into their superannuation funds.

This means that the federal government will contribute a maximum of $0.50 for every extra dollar you contribute to your super fund up to a maximum of $500 per year, depending on your income.

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