Government planning to remove LISC disclosure requirements

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AIST LISC disclosureThe Australian Institute of Superannuation Trustees (AIST) has called on the Government to not change the requirement to separately disclose the Low Income Superannuation Contribution (LISC).

The AIST claims that the Government is planning to repeal regulations which require that the LISC be separately disclosed on super fund member statements. If repealed the LISC could be bundled with other concessional superannuation payments, such as the government co-contribution.

The AIST is concerned this will “effectively mask the benefits of LISC to millions of members”

The Government had planned to repeal the LISC, but following a deal with the crossbenchers it is set to continue until 30 June 2017.

“AIST believes it is important that the estimated 3.2 million Australians that receive the LISC are provided with full details about their payment on their super statements,” said an AIST statement.

LISC payments should be “transparent and fully disclosed to beneficiaries,” said AIST executive manager of policy and research, David Haynes.

“Separate disclosure of the LISC not only improves member engagement with super, but it will provide consumers with a greater understanding of the value of the Scheme.”

“Many LISC beneficiaries are unaware that they are receiving up to $500 a year to keep their super fair. Separate disclosure will ensure that they are kept informed about payments and they will also be much more aware when this important equity scheme disappears,” said Mr Haynes.

According to the AIST the LISC is a “much needed equity measure in the super system that corrects a tax anomaly whereby low income earners effectively pay tax at a higher rate on their super than their take home pay.”

Sub-regulation 7.9.20(2A) of the Corporations Regulations 2001 requires that periodic superannuation statements, other than for SMSFs, display the amount of the government co-contribution and the LISC separately.

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