LISC scrapping to hurt modest income earners
Working mums and those residing in rural and regional areas will be hardest hit amongst the 3.6 million Australians affected by the federal government’s plan to drop the Low Income Super Contribution (LISC), Industry Super Australia (ISA) analysis has found.
The LISC rebates up to $500 into the super accounts of working Australians earning less than $37,000 whose marginal tax rate is 15 per cent or less. It was initiated following a recommendation from the independent Australian future tax system report, known as the Henry Review, in 2010.
The May budget confirmed the LISC will be abolished in coming years to leave 3.6 million Australian workers with considerably less in their superannuation accounts.
ISA said scrapping the LISC will have a large impact on one in every two working women and 40 per cent of Australia’s rural and regional employees.
The legislation to abolish the LISC has been rejected by the Senate once, but is scheduled to return again after July for the new Senate to reconsider this legislation.
ISA chief executive David Whiteley said the retention of the LISC is necessary for the integrity of compulsory super.
“The reality is that until every Australian receives a tax concession on their super contributions, no other changes to the taxation of super will be accepted by the community at large,” Whiteley said.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
