improving equity in super

Our core responsibility is to grow and protect our members’ retirement savings. It’s why we’re calling for changes to the low-income super tax offset (LISTO).

sticking to super principles

The super system should allow all members to retire with confidence. But some members face inequitable outcomes. For example, low-income earners receive fewer super tax concessions than high income earners, despite needing them more.

 

 

 


 

what is the LISTO?

LISTO is a federal government super payment of up to $500 to eligible low-income earners (earning $37,000 or less per year). The LISTO was designed to correct the tax penalty that low-income earners experience when they pay more tax on their super contributions than on their take-home pay. It’s an important payment for almost 2.7 million Australians, 60% of whom are women and not working full time.*

 

 

What needs to change?

Changes to income tax brackets and legislated increases in the amount of Superannuation Guarantee (SG) paid on wages mean the LISTO no longer corrects the tax penalty experienced by low-income workers.

As a result, more than 1.2 million people (including more than 700,000 women) earning between $37,001 to $45,000 per year do not receive the LISTO payment.1

We recommend:

  • Government legislate to extend the LISTO eligibility to those earning up to the top of the second tax bracket ($45,000 per year), and linking the amount of the offset to the Superannuation Guarantee (SG).

 

 

Who benefits from these recommendations?

Our research suggests that around one in four HESTA members could see higher super savings if LISTO eligibility was extended.

This includes lower-paid workers, especially women and workers in regional and rural areas.

More than 70,000 additional HESTA members would receive the LISTO payment if the income threshold is lifted to $45,000.2

Recommended measures are expected to be cost-neutral if existing tax concessions are distributed evenly.

 

 

 

 

 

 

 

 


 

what HESTA members are telling us

42% of HESTA members do unpaid caring duties for an average of 38 hours a week, directly impacting their ability to undertake paid work. The message from our members is clear — low-income earners and women deserve a fairer go.

We all want to look after ourselves & support ourselves - honestly and fairly. Just give low-income earners/ women a fair go; so we don’t have to rely on men &/or family!

HESTA member

 

Remove the ‘penalties’ that disadvantage women when they parent or are care givers for elderly parents.

HESTA member

 

 

 

 

 

* See ASFA Research paper Achieving greater equity in superannuation, August 2024. 

1 Based on 2020-2021 ATO data, as referenced in the ASFA Pre-Budget Submission for the 2024-2025 Budget. 

2 As at FY24, based on HESTA members with estimated salary of between $37,001 and $45,000.