Calls for super tax offset changes to boost retirement savings

Font Size:

The tax cuts brought forward in last week’s Federal Budget announcement need to be matched by changes to the Low-Income Superannuation Tax Offset (LISTO) to stop Australians, and particularly women, taking a further hit to their retirement savings.

Industry bodies Industry Super Australia (ISA) and Women in Super said that changing the LISTO rate as part of the tax cuts announcement would add tens of thousands of dollars to the retirement savings of more than 1.2 million Australians, 700,000 of those being women.

According to ISA, the LISTO was aligned with the tax-free threshold and 19 per cent tax bracket and matched super guarantee contributions, but now those tax cuts have moved the tax brackets around with the LISTO stalled at $37,000 taxable income and the maximum tax refunded at $500 per year.

Women and Super and the ISA are both calling for the LISTO to cover workers earning up to $45,000, which would allow for each worker to get an extra $400 on average.

The changes to the tax brackets announced in the Budget moved the 19 per cent tax bracket to $45,000 and lowered the tax concession to 3.5 cents in the dollar, which the ISA claimed significantly reduced the incentives for hundreds of thousands of Australians to contribute extra to their super.

The two industry bodies suggest increasing the LISTO cap to $640 to maintain the integrity of the measure.

Making this change would provide $488 million in super tax breaks to those earning less than $45,000 and would provide a much-needed boost for those that raided their super as part of the early release scheme.

The government confirmed last week that it would not allow for a third wave of the early release super scheme.

Women in Super chair Catherine Wood said the change was especially important given that women had withdrawn around $14 billion in the early release scheme.

“The least the government can do is keep the LISTO relevant,” Ms Wood said.

“The LISTO is important to ensure lower income earners receive some tax relief for saving for retirement.

“It can never match the $10,000-plus annual tax break received by high income earners, and the government should at least maintain the integrity of the provision which impacts over half the female workforce.”

ISA chief executive Bernie Dean said the move was an important step in stopping the gender pay gap from widening.

“On average women are still retiring with almost half the amount of super than men,” Mr Dean said.

“This proposal will put more money into women’s super balances early in life – going some way to bridge the gender pay gap that unfortunately persists in retirement.”

The two industry bodies are also calling for the LISTO to increase in line with any legislated lifts in the super guarantee.

One of the announcements missing from last week’s Budget announcement related to whether the government would go ahead with increasing the super guarantee by 0.5 per cent from 1 July next year.

Do you think the government needs to make it more attractive for low income earners to contribute to super? Do you support the government increasing the rate of the superannuation guarantee next year? What do you think the government will do?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


Labor willing to fight over ‘massive design fault’ in super changes

Opposition says it will block government's poorly designed legislation.

No third tranche of early access scheme, says Senator Hume

Senator discusses likelihood of a third tranche of the early access to super scheme.

Government’s super amnesty to pay $588 million in unpaid super

Around 393,000 Australians will receive unexpected windfalls in coming weeks.

Written by Ben


Total Comments: 7
  1. 0

    I don’t think the super guarantee should be increased by 0.5% . Small businesses are suffering enough at the moment without any added issues.

  2. 0

    Another whinge about women earning less than men but disguised as a report on super payments. For a start, tax relief is not measured in dollars, it’s measured in percentages so, naturally, if you earn more you pay more tax and if there is a percentage reduction in the tax scales, the high earners benefit is higher than a low income earner.

    All industrial awards in Australia don’t mention gender, all workers are paid the same hourly rate so there is no pay gap. There is a difference between what one worker gets paid over another if one worker chooses to work overtime and the other does not. This is construed by women as a pay gap when in actual fact it is each person being paid for the hours they work.
    Labor kicked and screamed about RoboDebt and how it was unfair because it took annual earnings and used that to work out how much a person earned each fortnight by diving by 26. Now Labor is happy to accept that the annual earnings of one person against another that shows a pay gap is a true reflection of women earning less than men. The true test is to compare the hours worked not the total pay.
    The reason that women have less super than men is also tied to the hours worked. Some women take time away from work to raise a family and that non-working period doesn’t attract compulsory super so, again, the hours worked is the problem. The casual workforce has been around 20% for the past 30 years and a lot of those casual workers are women, some of whom have chosen that working life. Casual workers usually work less than the 38hour week and, naturally, earn less in wages and the compulsory super is also less.

    • 0

      Agree Horace. And frankly women taking time off work to have children is a cost of having children and should be factored into their budget. Perhaps the partner should make contributions to her super whilst she is not working?

  3. 0

    “Making this change would provide $488 million in super tax breaks to those earning less than $45,000 and would provide a much-needed boost for those that raided their super as part of the early release scheme.”

    Ummm……. why should those who “raided” their super now be rewarded with a “boost” to their super?

  4. 0

    Run a check where the so called raided super funds ended up,if you had a gambling problem before you have a even bigger one now.

  5. 0

    No .
    I think they need to lower immigration and start creating jobs.

    We also need to get a little bit of inflation back or everyone’s income will continue falling.

    Women who choose to work part time or take time off will never match men and women who work full time.

    They could however just save $50 a pay extra and that would make a hell of a different.

  6. 0

    My daughter lost her job during Covid she’s now receiving centerlink while looking for work can/should she have super taken from her Payments ,my concern is if she doesn’t keep contributing her super will disappear



continue reading


What chickens can tell us about living with COVID-19

Professor Amir Hadjinoormohammadi As the world grapples with rolling out various vaccines for the SARS-CoV-2 virus that causes COVID-19, there...


Vaccinations, transmission, contact tracing: COVID questions answered

What do we know about COVID-19? Given how new the disease is, how much has been learnt in the past...

Mental Health

What is agoraphobia and how is it treated?

Popping to the shops, picking up a coffee on the way to work, queuing up for entry to a gallery...


Benefits of kefir and what to look out for

Forget kale and nut butter: fermented foods are the one big health trend we'll all be spooning into our diet...

Age Pension

CPI figures point to an increase in the Age Pension in March

After pensioners were denied an Age Pension increase in September last year, due to a rare case of deflation in...


MND breakthrough offers hope damaged nerve cells can be repaired

There is hope of a breakthrough in treating motor neurone disease (MND) after Edinburgh researchers found a way to repair...


Avoid these common mistakes people make with bleach

Bleach is one of the most effective and least expensive disinfectants around, but it pays to remember it's not an...


The reasons your hair may be falling out

There are so many possible reasons why our hair falls out or – at very least – thins out, that...