Super fairness fix to boost retirement savings for 1.3 million low paid workers

The Super Members Council warmly welcomes the Government’s announcement today that it will boost the super savings of 1.3 million low-paid workers, mostly women, lifting incomes in retirement.

The Council has advocated strongly to unfreeze the LISTO, building strong momentum for a super rebate boost to help Australia’s lowest-paid workers, and further narrow the gender super gap.

SMC’s modelling found boosting the rebate paid to low-income workers could mean some lifetime low-paid workers could have up to $60,000 more in their super savings by retirement.

The Low-Income Super Tax Offset (LISTO) is a fairness measure to top up the super of low-income workers. It had been frozen for 13 years and fallen behind changes to tax brackets and super contribution rates.

The Council’s most recent research showed that 1.2 million workers missed out on a total of $3 billion since 2020 due to the LISTO being frozen, with women making up around 60% of those affected.

The Government has announced it will make two simple fixes to the LISTO, both of which were proposed by SMC in its advocacy, including:

• Lifting eligibility for the LISTO to fully cover the first two tax brackets. That means lifting LISTO eligibility to $45,000 (from $37,000).
• Increasing the cap on the rebate to $810 (from $500) completely refunding the tax these workers pay on their employer super contributions.

Currently, a cleaner earning $42,000 gets only a 1% concession on their super tax compared to their marginal income tax, while a senior manager earning $220,000 gets a 30% tax concession. Today’s announced changes will help to make the super system fairer for low-income workers.

SMC’s research shows women (approximately 737,000 in 2025–26) had been disproportionately affected by the LISTO freeze, missing out on $295 million this year alone.

Over a working life, a woman in the bottom 20% of wage earners could be better off by $60,000 in her super balance by retirement. Unfreezing the LISTO will be a major boost for younger workers and mums working part-time in frontline jobs in lower paid sectors: as carers and aides, retail assistants, hospitality workers, and many health workers.

The Council has consistently supported the principle of making the super system fairer, more equitable and more sustainable. Today’s changes to the Division 296 proposals are a good step forward.

Super Members Council CEO Misha Schubert said the boost to LISTO would make the super system even stronger and fairer for those who need it most.

“We all know, when something’s out of date, you fix it. By fixing the LISTO, the Government will make a big difference to the retirements of more than a million of Australia’s lowest-paid workers.”

“The LISTO boost is a win for low-paid workers, a win for women, a win for key workers, and a win for the principle that every single Australian deserves economic security and dignity in retirement.”