Low income super contribution Print E-mail
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.

 

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If you are a low income earner, you can also receive super co-contributions when you make personal (after tax) super payments. For more information, refer to Guide to superannuation for individuals - Co-contributions.

 

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For more information about concessional contributions, refer to Guide to superannuation for individuals - Concessional (before tax) contributions.

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:

  • you have concessional contributions for the year made to a complying super fund
  • your adjusted taxable income does not exceed $37,000 (if you are required to lodge a tax return)
  • you are not a holder of a temporary resident visa (New Zealand citizens in Australia do not hold a temporary resident visa and, as such, are eligible for the payment)
  • 10% or more of your total income is derived from business or employment
  • the amount payable is $20 or more.

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.

 

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For information about how to calculate your adjusted taxable income, refer to Income tests and how they affect you.

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.

 

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In the Mid-Year Economic and Fiscal Outlook 2011-12, the government announced you don't need to lodge a tax return to get your LISC.

If you need to lodge a tax return for other reasons, refer to Guide to lodging your tax return.

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:

  • You have reached the 'preservation age' (currently 55 years old) and are retired.
  • You are 65 years old or over (even if you haven't retired).

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

    Criteria met?

    Amount

    Super fund has my tax file number?

    Yes

    Made concessional super contributions?

    Yes

    $3,240

    Had an adjusted taxable income of $37,000 or less?

    Yes

    $35,000

    Received at least 10% of income from employment, business or a combination of both?

    Yes

    Had not held a temporary resident visa during the year?

    Yes

    Eligible for a LISC payment of more than $20 for the financial year?

    Yes

    Under the LISC, Julie will receive a government super contribution of $486 (15% of $3,240).

 

 

Attention icon

If you are a low income earner, you can also receive super co-contributions when you make personal (after tax) super payments. For more information, refer to Guide to superannuation for individuals - Co-contribution.

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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