To reduce the 15% contributions tax payable by low-income earners, individuals who earn less than a $37,000 adjusted taxable income (which includes taxable income, net investment losses, reportable fringe benefits and voluntary employer super contributions or personal deductible contributions) will have the first $500 of contributions tax refunded back into their super account via the Low-Income Superannuation Tax Offset (LISTO).
This tax offset is designed to reduce the tax payable on concessional contributions made to a super fund by low-income earners and thereby increase their accumulated super balances.
We will explain further the eligibility to make a super contribution and ability to claim a tax deduction later in the module.