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How do I qualify for the low income superannuation tax offset payment?
In Australia, contributing to super is the recommended way to save for life after retirement. For instance, if you are employed full-time, your employer is required by law to make super guarantee contributions for you, and you can also opt for salary sacrifice to your super if your employer allows it.
For those whose incomes are not high enough, the Australian government offers low-income super tax offset (LISTO) payments as a way of boosting their super contributions while lowering their accessible income.
You may receive a LISTO payment if your annual income is under $37,000. Your super fund account must have your Tax File Number (TFN) and should have received concessional contributions made by you or your employer on your behalf that year. The LISTO payment is usually a percentage of your concessional contributions for the relevant financial year and ranges from $10 to $500.
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This article is over two years old, last updated on October 20, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent superannuation articles.
How can I find out if I’m eligible for a low income super tax offset remittance?
To know if you are eligible for a LISTO payment, simply answer the following questions:
- Did you provide your TFN to your super fund?
The Australian Taxation Office (ATO) deposits your LISTO payment into your super fund account, which may not accept the payment unless your Tax File Number (TFN) is on file.
- Did your super fund receive any concessional contributions during the financial year?
If your employer made super guarantee contributions for you or allowed you to salary sacrifice super contributions, these count as concessional contributions, which are contributions from your before-tax income. Suppose you were unable to make concessional contributions but contributed to your super using your after-tax income. You may then qualify for the government’s superannuation co-contribution for low income earners.
- Are you a low-income earner?
As the name suggests, LISTO payments are made to people who can’t make significant super contributions from their income. Accordingly, you may qualify for a LISTO payment only if you make less than $37,000 each year. Whether you qualify for a LISTO payment is determined by checking the adjusted taxable income reported on your tax return, assuming you have filed a return. Note that at least 10 per cent of your income must be earned as a salary or from offering business or professional services.
- Were you a temporary resident during the year?
You need to be a citizen of either Australia or New Zealand, or an Australian permanent resident, to qualify for a LISTO payment.
How is the low income super tax offset payment calculated?
Typically, a LISTO payment equals 15 per cent of an individual’s concessional super contributions for that year, up to a maximum of $500. If they did not make any concessional contributions, they can’t receive a LISTO payment. Australians eligible for a LISTO payment of less than $10 will usually receive the minimum $10.
You can find out the value of your LISTO payment by totalling your concessional contributions, calculating 15 per cent of that amount, and checking if this estimated value exceeds $500.
For example, suppose your income was $35,000 in the financial year 2020-2021, and you received super guarantee contributions from your employer worth $3,325 but made no other concessional contributions. You may then qualify to receive $499 as a LISTO payment, which is lower than the cap of $500. The ATO typically pays this amount into your super fund, but you can have it sent directly to you if you have reached your age of preservation and met a condition of release.
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