AIST said the government is planning to repeal the regulation which currently requires the separate disclosure of LISC, and will bundle it together with other super concessional payments.
The superannuation trustees lobby group believes, however, that if the government were to take this action it will “effectively mask” the benefits that the separate disclosure of LISC provides to “millions of members”.
“With the LISC to remain in place until at least 30 June 2017, AIST believes it is important that the estimated 3.2 million Australians that receive the LISC are provided with full details about their payment on their super statements,” a statement from AIST said.
AIST executive manager of policy and research David Haynes said LISC payments should be transparent and “fully disclosed” to beneficiaries.
“Separate disclosure of the LISC not only improves member engagement with super, but it will provide consumers with a greater understanding of the value of the scheme,” Mr Haynes said.
“Many LISC beneficiaries are unaware that they are receiving up to $500 a year to keep their super fair. Separate disclosure will ensure that they are kept informed about payments and they will also be much more aware when this important equity scheme disappears,” he said.
AIST said it will continue to “fight for the survival” of the LISC, stating it is a “much needed equity measure” in the super system.
“[LISC] corrects a tax anomaly whereby low income earners effectively pay tax at a higher rate on their super than their take home pay,” a statement from AIST said.
“AIST and Industry Super Australia have made a joint submission to [ASIC] calling for change,” AIST said.
