Superannuation, tax wins for low-income earners
After extensive industry lobbying, the government has put forward measures that would help to boost the superannuation balances of low-income earners.
The government has moved to introduce the Low Income Superannuation Tax Offset (LISTO) to replace the Low Income Superannuation Contribution when it expires on 30 June 2017.
The measure will allow individuals with an adjusted taxable income of $37,000 or less to receive an effective refund of the tax paid on their concessional contributions, up to a cap of $500.
The government intends for this to support the accumulation of superannuation for low-income earners.
In particular, the government believes LISTO will assist women to boost their superannuation savings.
These projections are paralleled in the Association of Superannuation Funds of Australia’s research, which suggests this measure will provide a benefit of up to $500 a year for more than three million people, of which approximately two thirds are women.
The Institute of Public Accountants has expressed strong support for this move, and has long been an advocate of increasing measures to support low-income earners in the superannuation environment.
The SMSF Association has also expressed support for the measure, saying it encourages more “equitable treatment” for low-income earners.
Further, the government plans to extend the current spouse tax offset "to assist more families to support each other in accumulating superannuation".
The current income threshold for the receiving spouse, whether married or de facto, will be lifted from $10,800 to $37,000, according to budget papers.
A contributing spouse will be eligible for an 18 per cent offset worth up to $540 for contributions made to an eligible spouse’s superannuation account, the government said.
