Super Co-Contribution, LISTO, and Spouse Offset Strategies in Australia 2026-27: A Tax Agent Guide

For millions of Australians on low-to-middle incomes, the superannuation system offers a set of powerful, often underutilised government incentives designed to boost retirement savings. The government super co-contribution, the Low Income Super Tax Offset (LISTO), and the spouse contribution tax offset are three mechanisms that can collectively add thousands of dollars to a retirement nest egg over time — yet many eligible Australians are unaware they qualify. A registered tax agent can identify these opportunities and ensure they are correctly claimed when lodging your tax return.

Understanding the Government Super Co-Contribution

The government super co-contribution is a direct payment made by the Australian Government into your superannuation fund when you make personal (after-tax) contributions. It is designed to reward low-to-middle income earners who take proactive steps to save for retirement beyond the compulsory Superannuation Guarantee (SG) contributions made by their employer.

For the 2026-27 income year, the co-contribution applies to individuals with an income below the higher income threshold of $62,488. The maximum co-contribution of $500 is available to those earning $47,488 or less who contribute at least $1,000 of their own after-tax money into super. For incomes between $47,488 and $62,488, the co-contribution phases out progressively.

How the Co-Contribution Is Calculated

The co-contribution rate is 50 cents for every dollar of personal after-tax contribution, up to a maximum of $500. If you earn $47,488 or less and contribute $1,000 of your own money, the government adds $500 to your super fund. If you earn more than $47,488, the maximum co-contribution reduces by 3.333 cents for every dollar of income above the lower threshold.

Importantly, the co-contribution is calculated and paid automatically by the Australian Taxation Office (ATO) when you lodge your tax return — provided your super fund holds your Tax File Number (TFN). You do not need to apply separately. However, a tax agent can verify that your fund has your TFN on record and that your personal contributions have been correctly reported to the ATO through the SuperStream system.

Eligibility Requirements

• Income threshold — Your total income (including reportable fringe benefits and reportable employer super contributions) must be below $62,488 for 2026-27
• Personal after-tax contributions — You must make at least one personal contribution from your own after-tax money (not salary sacrifice) during the income year
• Age requirement — You must be under 71 years of age at the end of the income year
• Tax residency — You must be an Australian tax resident for at least part of the income year
• Not a temporary resident — Temporary visa holders are generally not eligible
• TFN on file — Your super fund must hold your Tax File Number

The Low Income Super Tax Offset (LISTO)

The Low Income Super Tax Offset (LISTO) is a separate government payment designed to address a fundamental inequity in the superannuation system. When employers make SG contributions on behalf of employees, those contributions are taxed at 15% within the super fund. For individuals earning less than $37,000, this 15% tax rate is actually higher than their marginal income tax rate — meaning they pay more tax on their super contributions than they would on equivalent take-home pay.

The LISTO effectively refunds this tax disadvantage by paying up to $500 directly into the super accounts of eligible low-income earners. Like the co-contribution, it is calculated and paid automatically by the ATO after you lodge your tax return.

How LISTO Works in Practice

The LISTO is calculated as 15% of your concessional (before-tax) super contributions for the income year, capped at $500. Concessional contributions include employer SG contributions, salary sacrifice contributions, and personal contributions for which you have claimed a tax deduction. If your adjusted taxable income is $37,000 or less, you may receive the full LISTO payment.

For example, if your employer contributes $3,000 in SG contributions during the year and your income is $35,000, the LISTO payment would be $450 (15% of $3,000). This payment goes directly into your super fund, effectively offsetting the 15% contributions tax your fund has already paid.

The Spouse Contribution Tax Offset

The spouse contribution tax offset rewards individuals who make super contributions on behalf of a low-income or non-working spouse. It is particularly valuable for couples where one partner has taken time out of the workforce for caring responsibilities, or where one partner earns significantly less than the other.

For the 2026-27 income year, a tax offset of up to $540 is available to the contributing spouse when they contribute at least $3,000 into their partner's super fund and the receiving spouse earns $37,000 or less. The offset is calculated at 18% of the contribution, up to a maximum contribution of $3,000.

Eligibility and Phase-Out Rules

• Receiving spouse income — The full offset applies when the receiving spouse earns $37,000 or less. The offset phases out for incomes between $37,000 and $40,000, and is not available above $40,000
• Contribution amount — The maximum offset of $540 requires a contribution of at least $3,000. Smaller contributions attract a proportionally smaller offset
• Receiving spouse age — The receiving spouse must be under 75 years of age
• Super fund eligibility — The contribution must be made to a complying super fund or retirement savings account
• Not a deductible contribution — The contributing spouse cannot claim a tax deduction for the same contribution

A tax agent can help you structure spouse contributions to maximise the offset while ensuring the receiving spouse's total super balance and contribution caps are not exceeded.

Common Mistakes That Cost Australians Money

Despite the simplicity of these incentives, many Australians miss out due to avoidable errors. A registered tax agent can identify and correct these mistakes before they result in lost entitlements.

• Not making personal contributions — The co-contribution requires you to make at least one personal after-tax contribution. Many eligible individuals assume their employer's SG contributions are sufficient, but these do not trigger the co-contribution
• Claiming a tax deduction for personal contributions — If you lodge a Notice of Intent to Claim a Deduction with your super fund, your personal contributions become concessional and are no longer eligible for the co-contribution. This is a common and costly error
• Super fund missing your TFN — Without your TFN on file, your super fund cannot receive the co-contribution or LISTO payment. Your tax agent can verify this before lodgement
• Exceeding the non-concessional contributions cap — Personal after-tax contributions count toward the non-concessional cap of $120,000 for 2026-27. Exceeding this cap triggers excess contributions tax
• Overlooking the spouse offset — Many couples are unaware of the spouse contribution offset, particularly when one partner has recently returned to part-time work and their income has dropped below the threshold

Australian Regulatory Context

These superannuation incentives are administered under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 and the Income Tax Assessment Act 1997. The ATO is responsible for calculating and paying both the co-contribution and the LISTO, and for verifying eligibility based on information reported in your tax return and by your super fund.

The Tax Practitioners Board (TPB) regulates registered tax agents in Australia. Only registered tax agents are legally permitted to provide tax advice and lodge tax returns on behalf of clients for a fee. When engaging a tax agent to help you maximise these super incentives, verify their registration on the TPB register at tpb.gov.au.

The ATO's SuperStream system ensures that super contributions and fund reporting are standardised and electronically transmitted. This system underpins the automatic calculation of the co-contribution and LISTO, but errors in fund reporting can delay or prevent payment. A tax agent can liaise with your fund and the ATO to resolve any discrepancies.

From 1 July 2026, the Payday Super reforms require employers to pay SG contributions on each payday rather than quarterly. This change increases the frequency of concessional contributions flowing into super funds, which may affect the timing of LISTO calculations and the accuracy of fund reporting during the transition period.

Practical Checklist: Maximising Your Super Incentives

• Check your income — Confirm your total income (including reportable fringe benefits) is below the relevant thresholds before making personal contributions
• Make a personal after-tax contribution before 30 June — Contributions must be received by your fund before the end of the income year to count for that year
• Do not lodge a Notice of Intent to Claim a Deduction — If you want the co-contribution, do not claim a tax deduction for your personal contributions
• Confirm your TFN is on file with your super fund — Contact your fund directly or check via your myGov account
• Consider spouse contributions — If your partner earns less than $40,000, a $3,000 contribution to their super could save you $540 in tax
• Lodge your tax return promptly — The ATO pays the co-contribution and LISTO after your return is processed. Early lodgement means earlier payment into your super
• Review your total super balance — Ensure your non-concessional contributions cap has not been exceeded before making personal contributions

How MyMoney® Can Help

Maximising government super incentives requires careful planning, accurate record-keeping, and a thorough understanding of the eligibility rules. A registered tax agent can review your income, contribution history, and super fund records to ensure you claim every dollar you are entitled to.

MyMoney® connects Australians with qualified, registered tax agents who specialise in superannuation strategies for individuals and families. Whether you want to maximise the co-contribution, claim the spouse offset, or ensure your LISTO payment is correctly calculated, our network of professionals can help.

Post a Brief on MyMoney® to describe your superannuation situation and receive tailored proposals from experienced tax agents. You can also Browse Tax Agents on MyMoney® to compare professionals and find the right expert for your needs.