Parliament has passed new legislation to realign the Low-Income Superannuation Tax Offset (LISTO), a reform aimed at improving outcomes for more than 1.2 million low-income workers, the majority of whom are women.
The reform lifts the LISTO income eligibility threshold from $37,000 to $45,000 and increases the offset from $500 to $810, as of 1 July 2027. This aligns the payment with the current 12 per cent Super Guarantee settings.
In doing so, the legislation aims to guarantee that people earning under $45,000 a year are not penalised with higher tax inside of super than outside of super.
The move is particularly beneficial for women, who make up 60 per cent of low-earning Australians.
Women in Australia today retire with 25 per cent less super than men. The median super balance of women aged 60–64 is $51,000 lower than for men, and women are around ten per cent more likely to have no super at all.
Research from the Super Members Council (SMC) has warned against a looming national crisis of older women entering retirement in poverty, unless urgent action is taken. Their report also pointed to events that had a disproportionate impact on women’s super balances, including separation, unpaid caregiving for children and older family members, as well as family violence.
Correcting superannuation inequity
The new LISTO policy was first announced by the Federal Government in October 2025 following sustained advocacy from organisations across the superannuation sector.
One of the organisations at the forefront of reform advocacy has been Women in Super, with CEO Jo Kowalczyk welcoming the passage of the legislation in Parliament as an important milestone in the fight for a fair superannuation system.
“This reform corrects a long-standing inequity in Australia’s retirement system that has left low-income workers – many of them women – paying more tax on their super than on their wages,” Kowalczyk said.
“For many years Women in Super and our members have advocated for the LISTO to be realigned so that low-income earners are not paying more tax on their super contributions than on their wages.”
Kowalczyk also said that watching the reform pass highlights “what sustained advocacy can achieve”, adding that the new legislation “will help ensure more low-income women keep more of their super working for them in retirement.”
Analysis from the SMC has suggested the outdated threshold meant low-income workers collectively missed out on an estimated $3 billion in super tax concessions since 2020.
To ensure the policy remains effective in the long-term, the reform also introduces a mechanism to align LISTO settings with future tax threshold changes.
“Reform should not only correct inequities – it should prevent them from re-emerging,” Kowalczyk said.
“Future-proofing LISTO will help ensure the system continues to work for low-income workers in the decades ahead.”