Super win for low-income workers

Australian Unions welcome the passage of legislation through the Parliament to lift the Low Income Superannuation Tax Offset (LISTO) and rein in excessive tax concessions on the highest super balances.

The LISTO was designed to ensure workers on low incomes paid less tax on their super than they did on their wages, but it had not been adjusted to keep up with the rest of the tax system.

By lifting the LISTO, low-paid workers will now retire with thousands of dollars more in superannuation. 

A part-time aged care worker will take home around $60,000 more at retirement as a result of fixing the LISTO, according to modelling by the Super Members’ Council.

This reform ensures low-income workers will no longer pay more tax on their super than they do on their wages, directing support to those who need it most. 

The passage of the LISTO reforms, alongside legislation to further rein in excessive tax concessions for those with the highest super balances, restores fairness to a system that should exist to deliver retirement security for all Australians.

The reforms build on the Albanese Government’s lifting of the superannuation guarantee to 12 per cent; legislating the payment of super on pay day; placing superannuation in the National Employment Standards to stamp out super theft; and paying super on Commonwealth Paid Parental Leave. 

Quotes attributable to ACTU Assistant Secretary, Joseph Mitchell: 

“Today’s passage of the Low Income Superannuation Tax Offset reforms through the Parliament is a major win for working people and restores fairness to Australia’s superannuation system. 

“No worker should pay more tax on their super than they do on their wages. This legislation finally addresses that glaring unfairness. 

“By fixing the taxation of low-income workers’ super, the Government has ensured these workers will retire with more super and the means to enjoy a better life after work.

“Unions also welcome the reigning in of tax concessions for those with the largest super balances. Super is meant to deliver a universal right to a dignified retirement, not operate as a tax minimisation scheme for the ultra-wealthy.”