Medical professionals share a unique set of circumstances when it comes to the structure of their employment, source(s) of income and associated superannuation contributions. This is particularly true if employment is split between the State Government and Private Practice or Consultancy.
In such circumstances, it is not uncommon to hold multiple superannuation accounts. A retail (private) or industry superannuation fund would likely have been established through private practice; an employee of the State Government may maintain a Superannuation account with State-based provider, GESB.
Developing strategies around how best to direct superannuation contributions from all sources will be of benefit, whether in the form of an increased retirement savings base, reduced (personal or superannuation) income tax liability, increased cashflow or a combination of all three.
Where an account with GESB is held, these benefits may be magnified by taking advantage of the unique features available.
Superannuation Contributions
Non-Concessional Contributions
If you are below age 75 (or rather up to the 28th day of the month following your 75th birthday) and have a ‘total superannuation balance ‘less than $1,900,000 (increasing to $2,000,000 from 1 July 2025) you are eligible to make non concessional contributions. Non concessional contributions are limited to $120,000 pa. People with a total super balance below $1,660,000 ($1,760,000 from 1 July 2025) can bring forward up to two future years’ worth of annual non-concessional contribution (three years annual cap in total) and contribute up to $360,000.
Concessional Contributions
Concessional contributions are those that are made into your super fund before tax. Except for untaxed schemes, contributions tax of 15% applies to these contributions. Concessional contributions are generally subject to an annual limit, currently (and beyond 1 July 2025) $30,000 pa. It is sometimes possible to use previous years’ unused concessional cap amounts.
Concessional contributions include:
Mandated employer contributions such as super guarantee (SGC)
Salary sacrifice contributions
Personal deductible contributions, amongst others
From 1 July 2025 SGC will be paid at a rate of 12.00% pa. When your income reaches the maximum contributions base, your employer’s obligation to make superannuation payments on your behalf ceases, unless negotiated otherwise.
Employees on a high income and who have multiple employers can ‘opt out’ of their entitlement to SG employer contributions where these contributions would cause them to inadvertently breach their concessional contributions cap. Employees who are eligible to ‘opt out’ should negotiate to have SG amounts that would have otherwise been contributed to super paid as salary.
Private Sector Funds
Balances held in the ‘accumulation’ phase of private sector superannuation, whether a retail, industry or self-managed superannuation fund are uncapped, although eligibility to make certain voluntary contributions can be impacted.
There are two types of contributions, those which are made from after-tax monies, or for which no tax deduction is claimed, called non-concessional contributions and concessional contributions, such as SG or salary sacrifice contributions, which generally are generally deposited to super before tax.
GESB Gold State and West State
GESB Gold State and GESB West State are untaxed, constitutionally protected superannuation funds. They are not subject to the current legislation that applies to ‘general’ concessional superannuation contributions; contributions made to GESB Gold State and (or) GESB West State cannot, on their own, cause an individual to exceed their general concessional contributions cap.
GESB Gold State (and GESB West State) are subject to a lifetime untaxed plan cap, currently $1,780,000, increasing to $1,865,000 from 1 July 2025. You are able to accumulate, either through untaxed concessional contributions or untaxed investment earnings, up to this limit, before being subject to additional tax penalties upon the balance (or part thereof) being withdrawn. Amounts below the lifetime limit are taxed at a concessional superannuation rate depending on your age, amounts in excess of the limit attract the highest marginal tax rate.
GESB Gold State is an untaxed, defined benefit scheme. These accounts are not affected by investment markets, the balance instead determined by a formula based on your accumulated length of service, average contribution rate and average salary of over the current and preceding two years.
GESB West State differs from Gold State in that it is an accumulated account, funded (contributions are physically made) and is subject to market movements.
Being ‘untaxed’ funds, no tax is payable, either on investment earnings or contributions made to Gold State or West State. All taxes are instead deferred, until the balance or part thereof is accessed in retirement or on rolling to an alternative superannuation fund.
Beyond Work…
Over the course of your working life, the balance held, and contributions made to multiple superannuation accounts must be carefully considered, particularly where different types of superannuation funds are involved.
When you cease work or reduce working hours, an income stream may be commenced.
Accessing super accrued in a GESB West State or Gold State Superannuation Fund would trigger the application of the taxes deferred given that a benefit is accessed.
Potential Planning Issues (and Strategies)
Holding multiple superannuation accounts, where GESB Gold State, West State and numerous income sources are involved, can often pose a number of issues, particularly when nearing retirement:
Contributions made to an untaxed fund may, over the course of your working life, lead the balance of your GESB Gold State or West State fund to approach (or exceed) the lifetime untaxed plan cap.
Contributions made on your behalf by multiple employers may cause a breach in the annual concessional contributions cap.
Excess concessional contributions may, where your superannuation balance exceeds $1,900,000 ($2,000,000 from 1 July 2025) inadvertently cause a breach in the non-concessional contributions cap.
On retirement, your accumulated superannuation balance may be in excess of the transfer balance cap.
A number of strategies may be considered to address the above and improve your longer term position, for example:
Redirecting contributions between superannuation funds.
Taking advantage of multiple untaxed plan caps (between GESB Gold State and West State).
Opting out of employer superannuation contributions where a high income and multiple employers are involved.
Salary sacrifice contributions, in lieu of forgone employer entitlements.
Contribution splitting strategies, where a spouse is in receipt of a lower income or has a lower superannuation balance.Maximising transfer balance caps at retirement by commencing a transition to retirement pension, using the income to make non concessional contributions to a spouse’s superannuation fund.
If you have one or a combination of the superannuation accounts mentioned in this article, or are facing issues similar to the above, contact the team at AMA Financial Services on 1800 262 346 or email advice@amafp.com.au.
AMA Services (WA) Pty Ltd. ABN 47 008 671 458 t/as AMA Financial Planning is an Authorised Representative of Hartley Financial Pty Ltd. ABN 22 124 384 274 | AFSL 480751 an Australian Financial Services Licensee
