Low Income Superannuation Contribution (“LISC”)

From 1 July 2012 the Government Low Income Superannuation Contribution scheme (LISC) provides a superannuation benefit of up to $500 for lower income earners with concessional superannuation contributions during the year.

The purpose and effect is to eliminate the tax on the super contributions of low income earners. The LISC benefit is therefore subject to an income test (see “adjusted taxable income” below.)

Removal of LISC – from 1 July 2017 – and new ‘LISTO’

Consistent with Coalition policy the Low Income Superannuation Contribution is being removed, but has now been replaced with LISTO which operates to provide a similar outcome.

Legislative provisions for the removal were included with the Mining Tax repeal measures which gained the approval of Federal Parliament on 2 September 2014 and provide for the removal of eligibility for LISC from 1 July 2017.  Determination of eligible claims will cease on 30 June 2019.

News 3 May 2016:budget-2016_17 The 2016 Budget contains the proposal for a NEW Low Income Superannuation Tax Offset to be available from 1 July 2017. Legislation has since been passed.  See “LISTO

The LISC benefit is designed to offset the 15% contributions tax which is normally payable by the super fund on incoming contributions, and is paid to to the fund at the rate of 15% of eligible contributions up to a maximum of $500.

The LISC Benefit and formula

The LISC benefit is for those with adjusted taxable incomes* below $37,000 (not indexed) and is calculated as 15% of eligible contributions.

*”Adjusted taxable income” is calculated:

taxable income

+ adjusted fringe benefits total

+ target foreign income

total net investment loss

+ tax-free pension or benefit

+ reportable superannuation contributions

Less: any deductible child maintenance expenditure for that year.

There is no tapering of the benefit for incomes above $37,000.

LISC is up to $500 cash paid into your superannuation account, and can be paid to you immediately if you have reached preservation age and have retired, or are aged at least 65 years

  • Similar to the co-contribution scheme, the 10% income from employment or self-employment test must be satisfied.
  • LISC is calculated as 15% of your eligible super contributions.

Eligible Contributions

Contributions on which the low income benefit is calculated must be ‘Concessional contributions’, in other words, the tax deductible kind. This is an important distinction from the Co-contribution scheme, which applies to after-tax (i.e. non-deductible) contributions.

Eligible concessional superannuation contributions include:

  • Superannuation Guarantee contributions,
  • employer contributions under a salary sacrifice arrangement, and
  • personal contributions which are allowed as an income tax deduction.
  • The Government benefit is payable to the super fund on the member’s behalf, its effect being to relieve the 15% tax which is normally payable by the fund on the incoming concessional contributions.

To relieve the ATO from the administration costs of paying small amounts, the calculated LISC amount must be at least $20.

Further information:

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This page was last modified on 2018-11-26