What do the 1 July changes mean for your super?

Updated 1 July 2020 with the changes to the work test age from the 2019/20 Federal Budget.

The start of the 2019/20 financial year saw a few changes to super. This included measures to protect your super from erosion by fees and costs, known as the ‘Protecting Your Super Package’.

Announced in the 2018/19 Federal Budget, and then amended following public consultation, these measures are now law. While they took effect from 1 July 2019, not all of the changes apply to our members.

We haven’t introduced some of these measures

As a WA public sector super fund, our state super regulations don’t currently allow us to carry out some of the requirements of the ‘Protecting Your Super Package’. At this stage, we won’t be introducing these measures:

• Cancelling insurance for inactive members
  Super funds are required to cancel insurance within super accounts that haven’t received a contribution or rollover for 16 months, unless the member chooses to opt in.

• Transfer of inactive, low-balance accounts to the ATO
  Super accounts with less than $6,000 that have been inactive for 16 months, will now be transferred to the Australian Taxation Office (ATO). The ATO will then reunite the funds with the member’s active super account, if certain conditions are met.

If our regulations change in the future and either of these measures impact our members, we’ll update you through this website.

These changes now apply to your super

Here’s a summary of the changes that we introduced for our members from 1 July 2019, and what they could mean for your super savings.

If you’re a GESB Super member, you may now also be able to take advantage of catch-up concessional contributions.

Capping fees on low-balance accounts

A new cap, or limit, now applies on certain fees for super accounts with balances of less than $6,000, to help prevent them from being eroded by fees.

Who is affected?

If you have a GESB Super or West State Super account, this change is relevant to you.

At the moment, this change won’t affect Transition to Retirement Pension, RI Allocated Pension or Term Allocated Pension accounts.

What happened?

From 1 July 2019, if your GESB Super or West State Super account balance is less than $6,000 on the last day of the financial year, a limit applies on the administration and investment fees on your account.

These fees will be capped at 3% of that balance. If the total administration and investment fees you were charged during the financial year are more than the amount allowed by the cap, the difference will be refunded to your account within three months.

If your account is closed, and your balance is less than $6,000 on the day your membership ends, the 3% fee cap also applies.

Both the administration fee and Indirect Cost Ratio (ICR) for your GESB Super and West State Super are subject to the new cap.

If you have more than one of these accounts, the cap applies to each account individually.

Other types of fees, such as premiums for any insurance within your GESB Super or West State Super account, aren't included in the cap.

More information

Learn more about fees for GESB Super, West State Super, Transition to Retirement Pension, RI Allocated Pension, and RI Term Allocated Pension.

Removal of exit fees on all accounts

From 1 July 2019, super funds are no longer allowed to charge exit fees. This aims to remove any barriers for members who need to combine their super accounts.

We removed our transaction fees, including exit fees for full and partial withdrawals, effective 15 December 2018.

Work test exemption and removal of work test requirement for recent retirees

Changes to the work test rules offer eligible members an extra year to contribute to their super, from the end of the financial year in which they last met the work test. The work test requirement was also removed for those aged 65 and 66. This gives recent retirees, and those preparing for retirement, an opportunity to boost their super balances.

Who is affected?

If you have a GESB Super or West State Super account and you are aged 65 to 74, this change is relevant to you.

What happened?

Previously, if you were aged 65 to 74, you needed to have worked for at least 40 hours for 30 consecutive days in the current financial year, to be eligible to make voluntary super contributions. This is known as the ‘work test’.

From 1 July 2019, the work test exemption was introduced. This means you can make voluntary contributions without needing to satisfy the work test, if you meet all of the exemption criteria below. These contributions could include salary sacrifice, personal after-tax contributions, and contributions you claim as a tax deduction.

The work test rules were revised again in the 2019/20 Federal Budget. From 1 July 2020, if you're aged 65 or 66, you are no longer required to meet the work test in order to make voluntary contributions to your super.

How to make a voluntary contribution under the work test exemption

You need to complete an ‘Acknowledgement of personal contribution’ form to declare that you meet these work test exemption criteria:

• Are aged 67 to 74 years
• Met the work test in the previous financial year
• Had a total superannuation balance under $300,000 at the end of the previous financial year, and
• Haven’t relied on the work test exemption to make contributions before

For a copy of this form, please contact your Member Services Centre on 13 43 72 between 7.30am and 5.30pm (AWST), Monday to Friday.

Please note that the work test exemption only applies for the financial year that you make the declaration - and you can only use it once. Any contributions you make under the work test exemption are also subject to your annual contribution caps.

More information

• Learn more about adding money to your super
• Make the most of your contributions with our contributions calculator