How to help your GESB clients manage their untaxed super benefits

As an adviser, it’s important to know about the unique benefits available to your clients who have an untaxed, constitutionally protected fund, such as West State Super or Gold State Super.

One of these benefits is the untaxed plan cap. For the 2026/27 financial year, the amount of super that can be paid as a lump sum or transferred to a taxed fund and still receive tax concessions is $1.935 million¹ per super fund, indexed annually.

For your West State Super or Gold State Super clients, this represents an opportunity to grow their super beyond the concessional contributions cap for taxed funds – but it’s important to consider the potential drawbacks.

Here are some ways you could support your clients in managing their untaxed plan caps in West State Super and Gold State Super, while making the most of their unique features.

Be aware of penalties for exceeding the cap

If a member exceeds their untaxed plan cap in West State Super or Gold State Super, they will be taxed at a rate of 47% on the amount over the cap when they roll over or withdraw the money.

When supporting your clients to grow their super, it’s important they understand a range of elements can count towards the cap, including:

• Employer contributions
• Salary sacrifice contributions
• Investment returns

For clients with higher account balances, the growth of their investment over time could even put them at risk of exceeding their cap. Once a client exceeds their untaxed plan cap, they may no longer benefit from the tax savings that could be available through salary sacrifice contributions to their West State Super account.

Consider transferring funds to a GESB Super account

Your clients who have West State Super accounts with us can choose to also open a GESB Super account for their retirement savings. This means if they are likely to reach the untaxed plan cap before they retire, they could explore transferring most of their benefit to their GESB Super account, while keeping their West State Super account open.

This could allow them to continue receiving employer and salary sacrifice contributions to their West State Super account, while managing their remaining balance within the untaxed plan cap.

It also means they can continue enjoying some of the other unique features of West State Super, which aren’t available with most super funds.

When advising West State Super members, it’s important to remember that these accounts cannot be reopened once they are closed.

Explore a transition to retirement strategy

Once a member is eligible, for example, if your client with West State Super reaches preservation age or a Gold State Super member has turned 55, they could choose to access their super while they are still working, for example through our Transition to Retirement Pension.

They might then choose to transfer part of their Gold State Super or West State Super benefit to their transition to retirement account to help them stay within the untaxed plan cap in their super account. Tax would be deducted from their untaxed element at a rate of 15% on the amount transferred below the untaxed plan cap.

Take advantage of any pre-1 July 1983 service

If your client has a WA public sector service period that started before 1 July 1983, this is referred to as ‘pre-1 July 1983 service’. This forms part of the tax-free component of their super benefit, calculated when a lump-sum benefit is withdrawn or rolled over to a taxed super fund.

Calculating their pre-1 July 1983 amount could have an impact on the tax components of your client’s super benefit and how much tax is payable when they access their benefit from the fund.

For your clients who have pre-1 July 1983 eligible service and have an untaxed super fund, such as Gold State Super or West State Super, they may be able to maximise their tax-free component by making personal after-tax contributions to their untaxed super fund before they access their benefit.
To learn more about how benefits are calculated for clients with pre-1 July 1983 service in Gold State Super or West State Super, please contact Greg Stewart.