Over three million people will benefit from the Low Income Superannuation Tax Offset, which starts from 1 July 2017, according to the Association of Superannuation Funds of Australia (ASFA).
The Low Income Superannuation Tax Offset (LISTO) provides a refund (it is not actually a tax offset) of contributions tax for low income earners, up to $500. It replaces the Low Income Superannuation Contribution (LISC), which did the same thing. The LISC was introduced under Labor and repealed by the Coalition, with effect from 30 June 2017. However in the 2016 Budget the Government decided to replace it with the LISTO.
“Its revival, under another name, in last year’s budget was most welcome,” said ASFA.
ASFA estimates that about 3.1 million people will receive the LISTO, 63% of whom will be women.
“They can expect to receive around $260 on average, which is a good help because the average super balance of recipients is less than $50,000,” said ASFA CEO Dr Martin Fahy.
ASFA expects that around 4 million people will benefit from the suite of superannuation changes applying from 1 July 2017. This includes around 850,000 who will benefit from expanded ability to claim a tax deduction for personal super contributions.
ASFA estimates that around 270,000 people will be affected by the changes to Transition to Retirement pensions, around 110,000 people will be affected by the $1.6 million Transfer Balance Cap and around 80,000 by the lower non-concessional contributions cap.
“Up to 400,000 people could be affected by the reduction in the concessional contribution cap to $25,000 a year and a higher rate of tax on contributions for those earning $250,000 or more,” he said.
Dr Fahy urged consumers to get ready for the new super rules, if they hadn’t already.
“Talk to your fund and make sure you understand how the new rules will impact you including any potential benefits,” he said.