More than a million extra Australians on modest incomes are expected, on government estimates, to get a government top-up to their super under a change that is now law. The Low Income Superannuation Tax Offset (LISTO) will rise to a maximum of $810, and its income threshold will lift from $37,000 to $45,000.

The change does not start until 1 July 2027. That makes 2026–27 the last full year under the old limits, and it is worth understanding the gap the change is designed to close.

What LISTO does and who gets it now

LISTO is designed to refund the 15% contributions tax that super funds deduct from before-tax contributions made for lower-income earners. Without it, some workers would pay more tax on their super than on their wages.

According to the ATO, the offset currently equals 15% of a person's concessional contributions for the year, up to a maximum of $500. The minimum payment is $10.

To qualify, the ATO says a person must have an adjusted Taxable Income of $37,000 or less. At least 10% of their total income must come from employment or business. They must not have held a temporary resident visa at any time during the year, although New Zealand citizens are exempt from that rule.

There is no application form. The ATO works out eligibility from tax return and fund information and pays the amount directly into the person's super account.

The money then sits in super like any other contribution, generally preserved until retirement. The ATO says people who have reached preservation age and retired may be able to ask for the payment to be made to them directly through ATO online services.

Concessional contributions include more than employer SG. Salary sacrifice and personal contributions for which a Tax deduction is claimed also count, so a low-income earner who adds a little extra may lift their LISTO, up to the cap.

The $500 cap that no longer fits a 12% super guarantee

The current $500 maximum was set when the super guarantee (SG) rate was much lower. Now that employers pay 12% of earnings, contributions tax on a full-time low-income worker's super can exceed the offset.

Take someone earning exactly $37,000. Their employer's 12% SG contributions come to $4,440 a year. The fund's 15% contributions tax on that is $666, but LISTO refunds only $500, so the worker still loses $166 to contributions tax.

The ATO's description of the change says the new maximum is designed "to account for recent increases in the Superannuation Guarantee rate". The new threshold of $45,000 matches the top of the second Personal Income tax bracket.

Worked examples: what $810 could mean

The following examples are hypothetical, assume only employer SG contributions at 12%, and apply the legislated settings from 2027–28.

Example one: Sam earns $37,000. His SG contributions of $4,440 attract $666 in contributions tax. Under the new rules, LISTO would be 15% of $4,440, or $666, which is within the $810 maximum. That fully offsets the tax and is $166 more than the current $500 cap allows.

Example two: Mia earns $42,000. Under today's rules she gets no LISTO, because her income exceeds $37,000. From 2027–28, her SG contributions of $5,040 would generate a LISTO of $756 (15% of $5,040), paid into her super.

Example three: Jo earns $45,000. Her SG contributions of $5,400 produce $810 in contributions tax, which exactly matches the new maximum offset.

A fourth case shows how the cap bites even below the threshold. Someone earning $30,000 with $3,600 in SG contributions would have a calculated LISTO of $540, but today receives only $500. Under the new $810 cap, the full $540 would be paid.

The examples ignore Investment returns and fees. Actual amounts will depend on total concessional contributions, adjusted taxable income and the other eligibility tests.

How many people stand to benefit

Treasurer Jim Chalmers said when announcing the change in October 2025 that about 1.3 million people are currently eligible for LISTO. He said the expanded offset would reach about 3.1 million people.

The government estimated the cost at about $435 million over the forward estimates. These are government projections, and the number of people who actually receive payments will depend on incomes and contributions in each year.

The change was announced alongside the redesign of the tax on super balances above $3 million. Both are now legislated, and the ATO's page on LISTO states: "This measure is now law."

Why the timing matters for part-time and casual workers

The workers most likely to fall between $37,000 and $45,000 include part-time employees, casual staff and people combining work with study or caring responsibilities.

The change interacts with other reforms. Payday Super started on 1 July 2026, so employer SG contributions now arrive within seven Business days of each payday rather than quarterly, making it easier to spot missing payments.

The personal income tax rate for incomes between $18,201 and $45,000 fell to 15% on 1 July 2026 and is legislated to fall to 14% from 1 July 2027. Because of the tax-free threshold, the average tax rate on wages at these income levels is well below 15%. LISTO stops super contributions being taxed more heavily than that income.

The current offset also has a hard income cut-off. A person just above the threshold receives nothing. The ATO's summary of the change describes only the higher threshold and maximum.

Key dates and what to watch

For 2025–26 and 2026–27, the old $37,000 threshold and $500 maximum still apply. LISTO for those years is generally paid after the ATO processes tax returns and fund reports, so lodging on time helps.

Because the current cut-off is strict, people whose income sits close to $37,000 this year may find that extra hours or a Bonus decide whether they receive anything for 2026–27.

The ATO warns that without a tax file number, a super fund cannot accept a LISTO payment. Checking that the fund holds a correct TFN is a simple step.

The higher $45,000 threshold and $810 maximum will first apply to the 2027–28 income year, which begins on 1 July 2027. Payments for that year would flow after tax returns are lodged from July 2028. A registered tax agent or the ATO's LISTO calculator may help people check where they stand.