Super tax debate suffocates action for low-income Australians

As politicians, industry groups, and financial experts spar over the $3 million super tax, which will only affect a fraction of Australians, another critical problem is being ignored.

The "vast majority" of people under 30 will never have more than $3 million in super, according to Australia Institute chief economist Greg Jericho.

The debate over taxing the wealthy's superannuation has overshadowed a growing issue for low-income earners: fewer are receiving the Low-Income Super Tax Offset (LISTO).

Cbus research said the current income threshold is leaving young tradies, apprentices, and women in construction, without support that would give their retirement savings a boost.

Cbus said the number of its members receiving LISTO has declined over the past five years because the income threshold has remained unchanged since its introduction in 2017.

Cbus deputy chief executive and chief member officer Marianne Walker said the freeze is affecting many members.

"Many young tradies, apprentices, and women in construction start their careers on low pay while learning their trade, yet the system isn't keeping up," Walker said.

"Raising the LISTO threshold to $45,000 makes sense. It's a direct investment in their financial security, setting them up for the long term by boosting their super savings."

Under the current settings, an apprentice earning $27,778 per year would reach their maximum LISTO entitlement early, long before they receive the full benefit.

"Boosting the cap to $810 would ensure workers aren't penalised simply because super contributions are rising as intended," Walker said.

In its 2025-26 pre-budget submission, Cbus argued that raising the LISTO threshold, permanently aligning it with the lowest tax bracket, and increasing the cap would support around 57,000 of its members - ensuring "the system works as it should."

Cbus figures show that 45% of its members under 18 received a LISTO payment last year, with women making up 18% of recipients - higher than their share of fund membership.

The problem, however, is widespread across industries.

According to HESTA's 2025-26 pre-budget submission, more than 70,000 of its members with incomes between $37,001-$45,000 missed out on $35 million in contribution refunds last year.

Modelling it cited estimated that 200,000 missed LISTO payments over the past four financial years have cost low-income workers over $102 million.

Rest, meanwhile, previously noted that the bottom 30% of households receive just 4% of super tax concessions.

Rest said the LISTO "goes a small way to making super tax arrangements fairer..."

"The LISTO is a hugely important measure for Rest members, with nearly half a million members receiving the benefit each year. Around 65% of those members are women," Rest said.

"The failure to update the LISTO settings over time means our members are missing out on vital additional superannuation, and some are paying more tax on super than on their take-home pay.

"This particularly impacts women, and particularly during ages where women are more likely to take time out from the workforce or reduce hours to care for children."