Want an extra $500 in your retirement savings? Check out the information below about how to get hold of $500 from the ATO each year directly into your super.
It sounds too good to be true, so read on and see if you qualify!
Let’s discover how you can increase your retirement savings by receiving up to $500 per year directly into your super fund through the Low Income Super Tax Offset (LISTO).
What is the Low Income Super Tax Offset?
If you’re an individual earning $37,000 or less annually, you may qualify for the LISTO. The Low Income Super Tax Offset is a government superannuation payment intended to aid low-income earners in preparing for retirement.
The LISTO is equal to 15% of your pre-tax super contributions, paid directly to your super fund. The maximum amount you can receive per financial year is $500, while the minimum is $10. In fact, even if you’re eligible for less than $10, the Australian Tax Office will round it up to $10.
Where did this come from?
The LISTO replaced the Low Income Super Contribution (LISC) on 1 July 2017. The LISC’s final year of contributions eligible for payment was 2016-17, with final determinations relating to years 2012-13 to 2016-17 to be processed on or before 30 June 2019.
The LISTO retains all of the same features as the LISC and will continue to support low-income earners while ensuring that they do not pay more tax on their super contributions than on their take-home pay.
So, how do you qualify?
To qualify for the LISTO, there are two key things you need to do:
- Earn less than $37,000, and
- Ensure your super fund has your Tax File Number (TFN).
As long as you or your employer pays your super contributions to a complying super fund, and your income is $37,000 or less per year, the ATO will automatically pay the LISTO directly into your super fund after your tax return is processed.
What do you need to do to get your $500?
Take action now! Ensure your tax return is completed on time each year and ensure your super fund has your tax file number (TFN). Without your TFN your super fund will be unable to accept the payment. Fortunately, you don’t have to take any specific action to receive the LISTO once the two criteria above have been met.
Example of an LISTO payment
Let’s say you earn $25,000. This means your employer will have paid $2,625 into your super fund. In this case, you lodge your online tax return in July, receive your tax refund and the ATO will also put another $500 into your super fund.
Earnings: $25,000
Super from employer: $2,625
Super from ATO: 15% x $2,625 = $394
Total superfund increase: $3,019
This is super beneficial (pardon the pun!) and particularly useful when young families are expanding and only one parent is able to work full time.
If you’re a low-income earner who wants to increase their retirement savings, check out the Low Income Super Tax Offset (LISTO) today. Remember, to receive the payment, make sure you lodge your online tax return on time and that your super fund has your TFN. As long as you meet the eligibility criteria, the ATO will take care of the rest and pay the LISTO directly into your super fund.
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