Introduced by the previous Labor Government the LISC offsets contributions tax for low income earners, up to a limit of $500. If the bill is passed in its present form the LISC will only operate for the 2012/13 financial year.
The LISC repeal is contained, among other measures, in the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2], which passed the House of Reps last week and will likely be making its way to the Senate next week. The first attempt to repeal the LISC was in the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, which was blocked by the Senate in March.
Speaking to the Parliament about the bill Steven Ciobo, Parliamentary Secretary to the Treasurer, said:
“Schedule 7 of the bill abolishes the Low Income Superannuation Contribution (LISC). The bill ensures that the LISC is not payable in respect of concessional contributions made on or after 1 July 2013.
The government will revisit concessional contribution caps and incentives for lower income earners once the budget is back in a strong surplus.
Low- to middle-income earners may be eligible for the superannuation co-contribution to boost their retirement savings.
The removal of the low income superannuation contribution will improve the budget position by $2.7 billion in cash terms by 30 June 2017“