About half of the $15 billion in tax breaks for superannuation contributions goes to the top 12 per cent of income earners, according to new research to be presented to the Senate this week.
The Australian Council of Social Service says the other half goes to the bottom 88 per cent, with those at the very bottom getting nothing, even after proposed reforms.
ACOSS will tell the Senate economics committee the proposed government contribution to the super funds of low-earning Australians would merely cut their tax penalty for putting money into super from 15 per cent to zero, leaving untouched the tax benefit for high earners of 32c in the dollar.
''We spend more on super tax concessions for high-income earners than it would cost to simply give them the pension,'' ACOSS tax policy officer Peter Davidson said.
''It's all the more wasteful because they are likely to save for their retirement.''
ACOSS will propose a flatter system of support in which all super contributions are taxed at the worker's marginal tax rate, offset by a rebate paid into their super fund at the end of each year.
One option modelled by the council would give a 100 per cent rebate for the first $300 of contributions, followed by a 20 per cent rebate for additional contributions up to $8000 per year.
ACOSS says the proposal would be revenue neutral and would make 80 per cent of super fund members better off. ''It would be simple,'' Mr Davidson said. ''Employers already know their employees' marginal tax rates and already deduct tax. This tax would come out of super fund contributions, not wages.
''The proposal has losers, and they will complain. The problem is that the people who best understand the system are the high earners and their advisers who benefit from it the most. The 80 per cent who would benefit from the change understand super the least.''
Superannuation Minister Bill Shorten has assembled a group of experts to advise him on ways to ensure the move from 9 per cent to 12 per cent compulsory super will not further disadvantage low income earners.
ACOSS will also ask the government to limit the ''rort'' that allows workers aged over 55 to churn their income through super funds, making concessionally taxed contributions which they then withdraw as untaxed benefits.
''Right now tens of billions are churned through funds for no other purpose than reducing tax,'' Mr Davidson said.