Workers who have recently lost their job could benefit from the government’s low income super contribution.


It’s estimated that at least 1 million Australians could lose their employment1 as the COVID-19 coronavirus continues to ravage the economy. Industries such as hospitality have been closed down, seemingly overnight, placing strain on household incomes across the country.

Despite the government’s JobKeeper payment that aims to ease the pressure on employers having to stand down staff, there will still be many people earning substantially less than usual, including staff who have accepted reduced working hours.

How low income super tax offset (LISTO) works

LISTO is a government superannuation payment of up to $500 per year to help low income earners save for retirement.

Before-tax super contributions are taxed by the government at 15%. The low income tax offset effectively refunds that tax for low income earners straight into their super fund.

You don’t need to do anything to claim the low income tax offset. It happens automatically when people lodge their tax return, providing the super fund has a copy of the super member’s tax file number.

Are you eligible for the LISTO?

You are eligible for the LISTO2  if you satisfy all of the following requirements:

  • you or your employer pay concessional (before tax) contributions for the year to a complying super fund – this includes super guarantee amounts
  • you earn $37,000 or less a year – to work out your eligibility, the ATO uses your actual or estimated 'adjusted taxable income'
  • you have not held a temporary resident visa at any time during the income year (note that New Zealand citizens in Australia are eligible for the payment) you lodge a tax return and 10% or more of your total income comes from business and/or employment, or you don't lodge a tax return and 10% or more of your total income comes from your employment.

Boosting low income super balances

AMP Technical Strategy Manager John Perri says the tax offset helps contribute to the super balances of low income earners.

“Up until now, a higher proportion of women3 than men have benefited from LISTO due to a range of factors including time spent out of the workforce to care for small children, returning to part-time, often lower-paid roles, where they haven’t had the benefit of pay increases and promotions.”

But it’s likely that will change over the coming year as unemployment rises and household incomes lower.

Some good news is that due to the ‘magic’ of compound interest, a $500 tax offset today could be worth much more over four or five decades. The further you are away from retirement, the more your savings will benefit, subject to market fluctuations, from this government boost. As John says, “These Australians have time on their side when it comes to saving into super.”

Find out more

To find out more about LISTO and other contributions that might help you and your family, check out the super contributions section.

If you want to understand more about the impact of COVID-19 on your finances and the investment markets visit our dedicated COVID-19 help hub. You could also register for one of the webinars AMP is running to keep you up to date.


1 https://www.abc.net.au/news/2020-03-24/centrelink-minister-stuart-robert-not-anticipate-coronavirus/12080612
2 https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Low-income-super-tax-offset/ (as at 7 April 2020)
3 AMP’s research and analytics team studied the data of 174,000 employed customers who had consolidated their super over a four-year period.

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