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Technical WriterThe Low Income Superannuation Tax Offset (LISTO) is a government initiative aimed at helping low-income earners save for their retirement by reducing the tax they pay on their superannuation contributions. This offset was introduced to ensure that low-income earners are not disadvantaged when it comes to building their retirement savings.
What is LISTO?
The LISTO is a tax offset that is available to individuals with a total income of up to $37,000 per year. It is designed to reduce the tax paid on concessional superannuation contributions, such as employer contributions and Salary Sacrifice contributions. The offset is calculated based on the amount of concessional contributions made to the individual’s Superannuation Fund during the financial year.
How does LISTO work?
When an individual makes concessional contributions to their Superannuation Fund, these contributions are generally taxed at a rate of 15%. However, under the LISTO scheme, low-income earners are eligible to receive a tax offset equal to 15% of their concessional contributions, up to a maximum of $500 per financial year. This means that if an individual earns $37,000 or less and makes concessional contributions to their super fund, they will receive a refund of the tax paid on those contributions, up to the $500 cap.
Who is eligible for LISTO?
To be eligible for the LISTO, individuals must have a total income of $37,000 or less in a financial year. Total income includes assessable income, reportable fringe benefits, and reportable employer super contributions. It is important to note that the LISTO is not available to individuals who have exceeded their Non-Concessional Contributions cap for the financial year or who have exceeded their transfer balance cap.
How to claim LISTO?
Claiming the LISTO is relatively simple. If you are eligible for the offset, your super fund will automatically apply the offset to your account and you will see the benefit when you lodge your tax return. You do not need to submit a separate claim for the LISTO, as it is calculated and applied by your super fund based on the information they receive from your employer and any additional contributions you make.
Benefits of LISTO
- Helps low-income earners save for retirement
- Reduces the tax paid on superannuation contributions
- Provides a refund of the tax paid on concessional contributions
- Encourages saving for retirement among low-income individuals
Conclusion
The Low Income Superannuation Tax Offset (LISTO) is a valuable initiative that helps low-income earners save for their retirement by reducing the tax they pay on their superannuation contributions. By providing a refund of the tax paid on concessional contributions, the LISTO ensures that all Australians have the opportunity to build a secure financial future for their retirement. If you are eligible for the LISTO, make sure to take advantage of this benefit and maximize your retirement savings.
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