To reduce the 15% contributions tax payable by low-income earners, individuals who earn less than $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.