Lock in indexation on super fairness for low-income Aussies

The Super Members Council is calling on the Australian Government to ensure an upcoming fairness fix for 1.3 million low-paid workers, mostly women, is “done once and done right” by locking in automatic indexation.

The Council welcomes the Government’s pledge last October to unfreeze the Low-Income Super Tax Offset (LISTO) for the first time in 13 years. This would lift the income threshold for who is eligible for the super top-up from $37,000 to $45,000 - and boost the amount of the rebate from $500 to $810.

But if indexation is not locked into the law, the Council’s modelling estimates that over 30 per cent of the upcoming increase to the maximum LISTO payment would be eroded within 5 years and around 445,000 fewer Australians would be eligible if the income tax thresholds remain the same.

Indexing both the LISTO payment amount and the eligibility threshold is the best way to protect low-income workers from inflation and would ensure fairness and consistency in indexation for the poorest and wealthiest Australians alike.

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

The Low-Income Super Tax Offset is a key fairness measure to top up the super of low-income workers so they don’t pay a higher rate of tax on their super than on their take-home pay. It had been frozen for 13 years and fallen behind changes to tax brackets and super contribution rates, eroding its value over time.

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

The Council’s most recent research showed that 1.3 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.

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. The changes announced by the Government will help to make the super system fairer for low-income workers.

SMC’s research shows women (approximately 740,000 in 2025–26) had been disproportionately affected by the LISTO freeze, missing out on $295 million this year alone.

Unfreezing the LISTO will be a win 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 ‘s CEO Misha Schubert said the boost to LISTO would make the super system even stronger and fairer for those who need it most, and this important reform must be futureproofed.

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

“And when you fix something, you make sure it's done once and done right, so you’re not faced with the same problem again in 5 years’ time. It just makes sense.”