SMC urges Govt to “future-proof” LISTO via indexation measures

Yasmine Raso

Senior Journalist, Financial Newswire

29 January 2026

The Super Members Council has welcomed the Government’s commitment to boosting the Low Income Superannuation Tax Offset (LISTO) income threshold and payment at the same time as renewing its calls for the impending legislation to lock in “automatic indexation”.

While the Government confirmed the income threshold would be lifted from $37,000 to $45,000 and the rebate from $500 to $810 to “account for recent increases in the Superannuation Guarantee (SG) rate”, the SMC said the absence of any protections amid heightened inflation and economic volatility invalidates any positive impact this reform would have on low-income workers and the gender super gap.

The peak body wrote in its submission to Treasury’s Better Targeted Superannuation Concessions consultation that it proposes the implementation of a “mechanism to permanently align the LISTO settings with future changes to the income tax thresholds and SG rate” and “future-proof LISTO recipients from inflation”.

The SMC recommended the Government look to index “both the LISTO payment amount and eligibility threshold to an appropriate index to maintain a constant real value of the payments over time”.

“In concept, applying this approach to LISTO would be consistent with the Bill’s proposed indexation arrangements for the thresholds on both the large balance ($3 million) and very large balance ($10 million) accounts, which are indexed to the Consumer Price Index,” the SMC’s submission said.

“In practice, it would mean the whole super system moves together in a coherent whole over time, rather than risk future erosion of the value of the fairness deal for the nation’s lowest income earners.

“It would enshrine greater guarantee of fairness at the bottom end of the super system to match a similar commitment for those at the top end.”

Having fallen behind in tax bracket changes and super contribution rate increases over the last 13 years, new modelling from the SMC has confirmed that 445,000 fewer Australians – of which 59 per cent are low-income working women – would be eligible for the LISTO if income tax thresholds remained the same, erasing over 30 per cent of the new maximum payment within five years.

So far in 2025-26, approximately 740,000 women have missed out on $295 million in super top-ups due to the LISTO freeze. Once the new rebate amount and thresholds come into effect expected from 1 July 2027, low-income workers are estimated to have up to $60,000 more in super by the time they reach retirement.

“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,” the SMC’s chief executive, Misha 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.”