LISTO ‘freeze’ leaves 1.2m workers with $500m less in super

Yasmine Raso

Senior Journalist

19 September 2025

The failure of the Low Income Super Tax Offset (LISTO) to keep up with tax bracket and super contribution rate changes over the past 13 years is estimated to leave 1.2 million lower-income workers out-of-pocket by $500 million in retirement savings this financial year, according to a Super Members Council (SMC) report.

Equating to approximately $60,000 less by retirement, the report also found that a total of $3 billion in super tax concessions has been missed since 2020 and that women accounted for approximately 60 per cent (737,000) of affected workers – missing out on $295 million in retirement savings alone this year.

The report indicated that this issue will further enter the spotlight when stage three tax cuts come into effect from 1 July 2027, “leaving one in four workers paying more tax on super than on income”.

The report, in additon to new survey results revealing 68 per cent of Australians support changes to LISTO, has precluded a digital campaign launched by the SMC to raise public awareness and urge the Federal Government to ‘unfreeze’ the measure and ensure all workers have access to fair super tax benefits.

The “two simple fixes” proposed by the SMC to the Government include:

• Lifting the eligibility for the LISTO to fully cover the first two tax brackets, which means lifting LISTO eligibility to $45,000 (from $37,000); and
• Increasing the cap on payments to $810 (from $500) to reflect the 12 per cent Super Guarantee.

“We all know when something’s out of date you fix it. Whether it’s wages, broken laws, or super – we update things to keep them fair for everyone,” Georgia Brumby, Acting CEO Super Members Council, said.

“One part of our super system has been frozen for 13 years, and more than a million low-paid workers, the majority of which are women, are being shortchanged. It’s time to fix it.

“At the heart of super is a deal: Australians put aside a portion of their money for their future – in exchange the government gives them a tax benefit. We must keep that promise by ensuring the system is fair and continues to deliver for all Australians – especially those on the lowest incomes.”