Online version of the 2013-14 Department of Health Annual Report

Note 23: Administered - Payables, Provisions and Liabilities

Notes to and Forming Part of the Financial Statements

Page last updated: 17 July 2019

Administered - Payables
 
2014
$'000
2013
$'000
Note 23A: Overdraft
Overdraft
-
(105,428)
Total overdraft
-
(105,428)
 
Note 23B: Suppliers
Trade creditors and accruals
(10,189)
(43,777)
Total suppliers
(10,189)
(43,777)
 
Suppliers expected to be settled
No more than 12 months
(10,189)
(43,777)
Total suppliers
(10,189)
(43,777)
 
Suppliers in connection with
Related parties
(793)
(3,684)
External parties 
(9,396)
(40,093)
Total suppliers
(10,189)
(43,777)
 
Settlement is usually made within 30 days. 
 
Note 23C: Subsidies
Subsidies in connection with external parties
(2,634)
(39,633)
Total subsidies
(2,634)
(39,633)
 
Subsidies expected to be settled
No more than 12 months
(2,634)
(39,633)
Total subsidies
(2,634)
(39,633)
 
Note 23D: Personal benefits
Indirect
(850,728)
(847,723)
Total personal benefits
(850,728)
(847,723)
 
Personal benefits expected to be settled
No more than 12 months
(850,728)
(847,723)
Total personal benefits
(850,728)
(847,723)
 
Note 23E: Grants
Public sector
Australian Government entities (related entities)
(6,968)
(7,281)
State and Territory Governments
-
(2,433)
Local Governments
-
(1,205)
Private sector
Non-profit organisations
(269,969)
(347,549)
Total grants
(276,937)
(358,468)
 
Total grants expected to be settled
No more than 12 months
(276,937)
(358,468)
Total grants
(276,937)
(358,468)
Settlement is made according to the terms and conditions of each grant. This is usually within 30 days of performance or eligibility.
     
Note 23F: Other payables
   
Department of Veterans' Affairs
-
(42,396)
Total other payables
-
(42,396)
 
Other payables expected to be settled
No more than 12 months
-
(42,396)
Total other payables
-
(42,396)
Administered - Provisions
 
Notes
2014
$'000
2013
$'000
Note 23G: Subsidies
     
Medical Indemnity provision
Incurred But Not Reported Scheme
23 I
(41,000)
(42,000)
High Cost Claims Scheme
23 I
(272,000)
(254,000)
Run-Off Cover Scheme
23 I
(82,000)
(96,000)
Total subsidies
(395,000)
(392,000)
 
Subsidies expected to be settled
No more than 12 months
(20,210)
(29,667)
More than 12 months
(374,790)
(362,333)
Total subsidies
(395,000)
(392,000)
The reconciliation of this provison is disclosed in 23I
 
Note 23H: Personal benefits
Indirect
(1,027,297)
(1,064,534)
Total personal benefits
(1,027,297)
(1,064,534)
 
Personal benefits expected to be settled
No more than 12 months
(1,027,297)
(1,064,534)
Total personal benefits
(1,027,297)
(1,064,534)

Administered - Liabilities

Note 23 I: Medical Indemnity Provision

The table below provides a summary of the movement of medical indemnity provisions in the Department’s Schedule of Administered Items for the financial year ended 30 June 2014.

 
Balance as at
30 June 2013
$'000
Claims paid
$'000
Administered Statement
of Comprehensive Income Impact
$'000
Balance as at
30 June 2014
$'000
Medical Indemnity Liabilities
Incurred But Not Reported Scheme
(42,000)
7,844
(6,844)
(41,000)
High Cost Claims Scheme
(254,000)
30,135
(48,135)
(272,000)
Run-Off Cover Scheme
(96,000)
3,083
10,917
(82,000)
Total
(392,000)
41,062
(44,062)
(395,000)

Medical Indemnity is administered by the Department under the Medical Indemnity Act 2002 and the Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010. The Department administers the following medical indemnity schemes:

  • Incurred But Not Reported Scheme (IBNRS);
  • High Cost Claims Scheme (HCCS);
  • Exceptional Claims Scheme (ECS);
  • Run-Off Cover Scheme (ROCS);
  • Premium Support Scheme (PSS);
  • Midwife Professional Indemnity (Commonwealth Contribution) Scheme (MPIS); and
  • Midwife Professional Indemnity Run-off Cover Scheme (MPIRCS).

In accordance with Note 1.4 a liability can only be recognised for IBNRS, HCCS and ROCS.

A summary of each of the schemes is provided below:

Incurred But Not Reported Scheme (IBNRS)
The IBNRS provides for payments to Avant Mutual Group for claims made in relation to its IBNR liability at 30 June 2002. Some claims that will be payable under the IBNRS may also be eligible for payment under the HCCS.

High Cost Claims Scheme (HCCS)
Under HCCS, the Government pays 50% of the cost of claims made to all Medical Indemnity Insurers (MIIs) that exceed a specified threshold, up to the limit of the practitioner’s insurance. The threshold to be applied depends on the date of notification of the claim, as follows:

  • from 1 January 2003 to 21 October 2003 - $2,000,000;
  • from 22 October 2003 to 31 December 2003 - $500,000; and
  • on or after 1 January 2004 - $300,000.

Exceptional Claims Scheme (ECS)
The ECS provides coverage for practitioners for the cost of medical indemnity claims that exceed the limit of their contract of insurance. To be covered by the ECS, the practitioner must have medical indemnity insurance cover to at least $15,000,000 for the period 1 January to 30 June 2003 and $20,000,000 from 1 July 2003.

Run-Off Cover Scheme (ROCS)
ROCS provides free run-off cover for specific groups of medical practitioners including those retired and over 65, on maternity leave, retired for more than three years, retired due to permanent disability or the estates of those that have died. This scheme is funded through the collection of support payments imposed as a tax on MIIs.

Premium Support Scheme (PSS)
The PSS helps eligible doctors with the costs of their medical indemnity insurance. Under this scheme, if a doctor's gross medical indemnity costs exceed 7.5% of his or her gross private medical income, he or she will receive a subsidy towards the cost of the premium beyond that threshold limit.

Midwife Professional Indemnity (Commonwealth Contribution) Scheme (MPIS)
Under this scheme, Medical Insurance Australia Pty Ltd (MIGA) is reimbursed for part of the costs of claims notified to MIGA on or after 1 July 2010. MIGA will pay the first $100,000 of each eligible claim, plus 20 cents in the dollar for claims costs between $100,000 and $2 million. The Government will contribute the remaining 80 cents in the dollar for claims costs between $100,000 and $2 million (i.e. Level 1 Commonwealth contributions) and will meet 100% of that part of the cost of any claim which exceeds the $2 million threshold (i.e. Level 2 Commonwealth contributions).

Midwife Professional Indemnity Run-off Scheme (MPI ROCS)
Under this scheme, MIGA is fully reimbursed for the costs of claims made by midwives who have ceased practice. The ROC scheme applies to claims (including incidents) notified to MIGA on or after 1 July 2010 by midwives.

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