Passage of LISTO reforms to benefit 1.3 million low-income workers

Under the changes, around 1.3 million low-income workers will receive new or higher government payments into their super accounts.

The Association of Superannuation Funds of Australia said this brings the number of people receiving the LISTO to 3.1 million, or 1 in 6 Australians with super. 

Eligibility for the LISTO will, in the future, be linked to the upper threshold of the second-lowest tax bracket, and the maximum payment will increase from $500 to $810. 

The two bills also introduce changes to reduce the amount of concessions received by superannuation members with total super balances above $3 million.

ASFA chief policy and advocacy officer James Koval said the legislation will boost the retirement savings of more than a million Australians by strengthening LISTO for low-income workers while applying a higher tax rate to the investment earnings of those with very large balances.

“The critical point is that super will still be concessionally taxed for every Australian, from the lowest earner to those with $20 million in super. In almost every circumstance, people will pay a lower tax rate on their super investment earnings than they would outside super," said Koval.

"The concession is now smaller for those at the top, but it is still a concession."

The Super Members Council (SMC) has likewise welcomed the changes, stating that the legislation will "powerfully lift the retirement incomes of the very lowest paid workers across Australia".

"For a woman who earns the minimum wage across her whole working life, our modelling shows it could deliver up to $60,000 more in her super by retirement – dramatically lifting her income," it said.

Research by SMC has indicated that 1.3 million workers missed out on a total of $3 billion since 2020 due to the LISTO being frozen, with women accounting for around 60 per cent of those affected.

Currently, a cleaner earning $42,000 gets only a 1 per cent concession on their super tax compared to their marginal income tax, while a senior manager earning $220,000 gets a 30 per cent tax concession, the council said.

"These LISTO reforms will help to make the super system fairer for low-income workers," it said.

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

SMC deputy chief executive Georgia Brumby said it was a landmark win for 1.3 million low‑paid Australians – mostly women – whose retirement savings will now "finally get the fair go they deserve".

“Unfreezing and fixing the LISTO corrects a longstanding injustice that saw low-income workers miss out year after year while higher-income earners continued to receive far larger tax concessions," Koval said.

ACTU assistant secretary, Joseph Mitchell, said the passage of the reforms was a major win for working people and restores fairness to Australia’s superannuation system. 

“No worker should pay more tax on their super than they do on their wages. This legislation finally addresses that glaring unfairness," he said.

“By fixing the taxation of low-income workers’ super, the government has ensured these workers will retire with more super and the means to enjoy a better life after work."

ACTU said it also welcomed the reining in of tax concessions for those with the largest super balances. 

Mitchell added, "Super is meant to deliver a universal right to a dignified retirement, not operate as a tax minimisation scheme for the ultra-wealthy."