Friday, 12 April 2024

    Offset helps low-income women

    When Rochelle Eardley gave birth to her son Romeo more than a year ago, she was not in a rush to get back to full-time work, ABC News reports.

    Ms Eardley, 28, had a full-time job as a personal assistant with a marketing company, but decided to take on a few days work about 11 months after having her son.

    She now earns well under $37,000 a year, working part-time as an office assistant at a law firm and, separately, at a marketing company.

    This makes her one of many Australian women working part-time or in low-income roles, eligible for a payment of up to $500 at tax time that goes towards saving for her retirement.

    The scheme, originally called the Low Income Superannuation Contribution (LISC) under Labor, but then renamed the Low-Income Superannuation Tax Offset (LISTO) when re-introduced in July 2017 under the then-Turnbull government, helps by basically handing back money to low-income people.

    The scheme was introduced under the former Labor Government in response to the Henry Tax Review finding that low income taxpayers should not be paying more tax on their super contributions than on their take-home pay.

    For low income earners, the 15 per cent tax on superannuation contributions meant they would have to pay more tax on their super contributions than on their other income.

    The LISTO effectively refunds the tax paid on concessional contributions by individuals with a taxable income of up to $37,000 — up to a cap of $500.

    Ms Eardley also gets a parenting payment, which helps the family meet general living expenses.

    “It gives me a little bit more time to stay at home with my little one, which is especially important in the first few years,” Ms Eardley said.

    The Federal Government estimated at the time of introducing LISTO that about 3.1 million low income earners would benefit, including approximately 1.9 million women.


    Superannuation offset helps low-income women boost retirement savings after having babies (ABC News)