|Low income super contribution|
What is the low income super contribution?
The low income super contribution (LISC) is a government super payment of up to $500 per financial year to help low income earners save for their retirement.
The LISC is 15% of the concessional (before tax) contributions you or your employer makes from 1 July 2012. The maximum payment you can receive for a financial year is $500 and the minimum is $20.
Are you eligible for the low income super contribution?
You are eligible for the low income super contribution (LISC), if you satisfy the following requirements:
If you lodge an income tax return, we will use the information on your income tax return to work out your eligibility for a LISC. If you do not lodge an income tax return, you don't have to do anything - we will work out your eligibility using other information we collect. However, this process will take up to 14 months to complete. Our website and LISC publications will be updated with more details about this before 1 July 2013.
How do you get your low income super contribution?
You do not need to do anything specifically to get the low income super contribution (LISC). If you lodge an income tax return, you will receive your LISC in your super account when we have processed your income tax return and received information from your super fund about your super contributions. If you do not lodge an income tax return, we will work out your eligibility using contributions information from your super fund along with other information we collect.
As we will pay the LISC directly into your super fund, you need to make sure your super fund has your tax file number, as we cannot send your LISC to a fund that does not have your tax file number.
Your super fund will let you know on your account statement that you have received your LISC. It may take up to 14 months from the end of the financial year for you to receive your payment.
You can apply to have your LISC paid directly to you if either of the following apply:
The direct payment form will be available from the end of the 2012-13 financial year.
Example: Calculating the low income super contribution
Julie earns $36,000 a year as a child care assistant. In the 2012-13 financial year, Julie's employer makes a 9% super guarantee contribution of $3,240 into her super fund. Julie lodges an income tax return which includes tax deductions of $1,000, resulting in an adjusted tax income of $35,000 ($36,000 - $1,000).
The table below shows how Julie worked out whether she was eligible for a LISC:
Table: How Julie worked out if she was eligible for a LISC
Under the LISC, Julie will receive a government super contribution of $486 (15% of $3,240).
How does it apply to deceased estates?
If a person dies part way through a financial year, their estate may be entitled to the low income super contribution (LISC) as a result of their concessional contributions accrued before their death. Eligibility for the LISC is worked out using the three tests described above, but the income tests are applied as if the person had continued to earn income at the same rate for the entire year.
Example: Working out LISC eligibility for a deceased estate
If a person died exactly halfway through the financial year and had already accumulated an adjusted taxable income of $15,000, their adjusted taxable income would be considered to be $30,000 for the purpose of the LISC eligibility tests.
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