Before taking action based on the information provided on this page, you need to consider your own situation and the relevant laws. You should seek advice that takes account of your particular set of circumstances. Check with your medical indemnity insurer if they have additional requirements, which may not be covered here.
The Department of Health makes reasonable efforts to ensure that the information provided on this page is accurate. However, before relying on any information on this page, you should always check that the information is accurate, current, and complete. The Department does not guarantee the accuracy, currency, or completeness of the information on this page. The Department accepts no legal liability for the information on this page.
What is the PSS?
How does the PSS work?
Who is eligible for the PSS?
In what circumstances will a medical practitioner not be eligible for the PSS?
Are there any special circumstances whereby a practitioner is an eligible medical practitioner?
Do medical practitioners have to apply separately for the PSS?
Will the PSS pay for stamp duty and GST?
Is there special support for rural procedural general practitioners (GPs)?
What information will need to be supplied to apply for the PSS?
Can medical practitioners receive the PSS if they practise both publicly and privately?
What if a medical practitioner is working as a medical practitioner part-time?
What are the gross indemnity costs?
What is gross private medical income?
Why do I have to provide an estimate of my gross private medical income?
What if my actual salary is less than my billings?
What happens if I only work with public patients?
What do I declare if I provide both public and private sector services?
What if I don't know what my employer covers me for?
What if I'm not sure of the circumstances/risks for which my insurer covers me?
What happens if I have both private and employer-indemnified medical indemnity cover?
Why is my gross medical income based on my billings and not my salary?
What is the premium period?
What are the medical practitioner's obligations with the PSS?
Which medical indemnity insurers offer the PSS?
What is the Premium Support Scheme (PSS)?
The PSS is an Australian Government scheme that helps eligible medical practitioners with the costs of their medical indemnity insurance. Eligible medical practitioners continue to see the benefit of the PSS through reductions in the level of premiums charged to them by their medical indemnity insurers. The Australian Government makes payments to medical indemnity insurers for the PSS.
The PSS was introduced on 1 January 2004, with payments commencing mid-2004.
Prior to 1 July 2020, medical practitioners could only access PSS subsidy if their indemnity insurer has entered into a contract with the Commonwealth. From 1 July 2020, all matters relating to the PSS will be consolidated in delegated legislation (rather than being spread across contracts and legislation).
How does the PSS work?
The PSS is designed to ensure that if a medical practitioner’s gross medical indemnity costs exceed 7.5% of his or her gross private medical income, he or she will receive a Government subsidy of 60% towards the cost of the premium beyond that threshold limit.
For example, if a medical practitioner’s gross medical indemnity costs exceeded 7.5% of his or her gross private medical income by $1,000, then the PSS would pay $600 (60%) of that and the medical practitioner would only have to pay $400 (40%) beyond the threshold.
Procedural GPs working in rural areas are eligible for the PSS regardless of whether they meet other PSS eligibility criteria. The PSS will cover 75% of the difference between premiums for these doctors and those for non-procedural GPs in similar circumstances (i.e. same location, same income, same insurer).
Who is eligible for the PSS?
- A medical practitioner whose gross medical indemnity costs exceed 7.5% of estimated gross income from private billings; or
- A procedural general practitioner in a rural area (Modified Monash areas 3-7); or
- A medical practitioner who has applied for and has been deemed to be eligible for a subsidy under the Medical Indemnity Support Scheme (MISS) for a premium period ending 1 July 2021, i.e. former MISS participants.
In what circumstances will a medical practitioner not be eligible for the PSS?
There are certain circumstances whereby a practitioner will not be an eligible medical practitioner and therefore ineligible for a subsidy. These circumstances include where:
- The practitioner’s private practice income is nil or less than $1000 for a premium period.
- The practitioner’s practice of his or her medical profession is carried on wholly outside Australia and its external Territories.
- A medical practitioner is not an eligible medical practitioner for a premium year (or any period in it) if the practitioner has practised outside Australia (and the external Territories) for a least 6 months of that year. The six-month period includes leave taken in the ordinary course of medical practice (such as holiday or illness) but does not include any other absence from practice as a medical practitioner.
- If during a premium period a medical practitioner practises outside Australia, in one of the circumstances referred to in section 7 of the https://www.legislation.gov.au/Details/F2020L00451">Medical Indemnity Rules 2020, the practice is taken to be practice in Australia for that premium period.
- The practitioner has not paid the insurer for a subsidy that the insurer must repay.
- a practitioner is prevented from being eligible for a subsidy if an insurer has requested that some or all of the subsidy paid to the medical practitioner be repaid to the insurer (on the basis it is a debt due to the Commonwealth). This rule also applies where the practitioner moves insurers – such that amounts owing to any insurer preclude the practitioner from being eligible for subsidy. It also includes reference to the pre-1 July 2020 scheme, such that any subsidy repayable under that scheme is also relevant for the purposes of determining eligibility for subsidy under the post-1 July 2020 scheme.
Are there any special circumstances whereby a practitioner is an eligible medical practitioner?
There are two special cases:
- A medical practitioner is an eligible medical practitioner if they:
- have a practice primarily based on public billings or services;
- take out cover for private practice and are not indemnified through any right to private practice arrangements; and
- have private income of equal to or greater than $1,000 (if their private income is less than $1,000 they are not eligible).
- A medical practitioner who practises only in the public sector during a premium period (earns no income from private medical practice) is an eligible medical practitioner for that premium period if the medical practitioner's contract of insurance provides run-off cover, retroactive cover or both for incidents that occurred in the course of, or in connection with, the practitioner's private medical practice at a time when he or she was deriving income from practising as a medical practitioner.
Do medical practitioners have to apply separately for the PSS?
No. Medical practitioners do not have to make a separate application to government for the PSS.
To be eligible for the PSS, medical practitioners simply have to indicate their willingness to participate in the PSS and initially nominate an estimated income point to their insurer when negotiating their annual medical indemnity premium. Medical indemnity insurers must ask medical practitioners about participating in the PSS before entering a contract of insurance to provide professional indemnity cover.
Medical practitioners who receive the PSS must inform the medical indemnity insurer of their actual income as requested by the Chief Executive Medicare in order to retain any PSS entitlements for that premium period and to make any necessary adjustments to the amount of premium support to which they may be entitled.
Will the PSS pay for stamp duty and GST?
No. Insurers will continue to include the cost of stamp duty and GST on medical indemnity invoices on the gross indemnity costs.
Is there special support for rural procedural general practitioners (GPs)?
Yes. As a special arrangement for procedural GPs working in rural areas, the PSS will cover 75% of the difference between premiums for these medical practitioners and those for non-procedural GPs in similar circumstances (i.e. same location, same income, and same insurer). Rural procedural GPs are eligible for PSS regardless of whether they meet other PSS eligibility criteria.
What information will need to be supplied to apply for the PSS?
Medical practitioners will need to provide their medical indemnity insurers with the following information if they are to be considered for a PSS entitlement:
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1. estimated income for the premium period in which PSS is sought;
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2. costs payable to other insurers for run-off cover or retroactive cover in the premium period for which PSS is sought;
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3. the medical practitioner's speciality;
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4. the medical practitioner's provider number(s); and
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5. the medical practitioner's practice address.
Medical indemnity insurers may already have some of this information. Medical indemnity insurers will only be asking medical practitioners for the information needed in order to apply the PSS. If a medical practitioner chooses not to provide this information, the practitioner will not be eligible for any PSS entitlements for that premium period.
Medical practitioners who receive the PSS must inform the medical indemnity insurer of their actual income as requested by the Chief Executive Medicare in order to retain any PSS entitlements for that premium period and to make any necessary adjustments to the amount of premium support to which they may be entitled.
Can medical practitioners receive the PSS if they practise both publicly and privately?
If the practice is primarily based on public billings and the medical practitioner obtains medical indemnity insurance for some private medical services performed, the medical practitioner must have estimated they will earn at least $1,000 from private medical services (and then actually earn at least $1,000) to be eligible for the PSS in a premium year.
What if a medical practitioner is working as a medical practitioner part-time?
The medical indemnity insurer will base the premium on the amount of money the medical practitioner advises they expect to earn during the premium period. The medical indemnity insurer will use this income estimate and other relevant gross indemnity costs for the premium period to determine the PSS eligibility and amount.
What are gross indemnity costs?
Gross indemnity costs are the medical indemnity costs charged by the medical indemnity insurer. These include the premium, membership fees, and any other costs payable for retroactive or run-off cover.
What is gross private medical income?
Gross private medical income means the total of all billings generated by an eligible medical practitioner from all areas of their practice for which they require medical indemnity cover for a premium period (in their name or for work for which they are personally liable). This includes Medicare benefits, payments by individuals, and payments by the Commonwealth department of Veterans' Affairs, worker compensation schemes and third party and/or vehicle insurers) whether retained by the medical practitioner or otherwise and before any apportionment or deduction of any expenses and/or tax.
If as part of the medical practitioner's medical practice, they derive income from any other sources (i.e. professional fees, incentive payments, etc.) this income must be included in the declaration of gross private medical income.
Why do I have to provide an estimate of my gross private medical income?
Eligibility for the PSS is based on a threshold of a practitioner’s cost for indemnity insurance. The threshold is 7.5% of a medical practitioner’s private medical practice income. If you meet or exceed this threshold, you are eligible for a PSS subsidy. Therefore, you need to provide an estimate of your gross private medical income in order to determine your eligibility for the PSS. Once you become eligible, the PSS will pay to your medical indemnity insurer 60% in the dollar for all your medical indemnity costs that exceed the 7.5% threshold.
What if my actual salary is lower than my billings?
You are required to report all of the billings that you generate for private medical services in order to determine if you exceed the 7.5% threshold. This is because the PSS provides financial support based on your medical indemnity insurance premium, which is based on your income from all of the services you provide and the level of risk involved in your area of specialty. Therefore, the PSS is based on the billings derived from all the services you provide, not the net income that you have agreed with your employer to retain because of your medical work.
What happens if I only work with public patients?
If you are fully covered for all of your medical work with respect to public patients by your employer, your billings are not counted as part of your gross private medical income. If you are fully indemnified for your public practice, and this is the only medical practice that you undertake, you will not receive a PSS subsidy. This is because you do not have any costs associated with your medical indemnity insurance, as your employer is paying these costs. However, if you do not have any gross private medical income as it relates to billings, but you do continue to have a liability for retroactive and/or run-off cover for earlier private practice, you may still be an eligible medical practitioner for the purposes of the PSS.
What do I declare if I provide both public and private sector services?
Where, for a premium period, your gross income includes the provision of both private and public medical services, your estimated gross private medical income for PSS purposes is limited to the income that relates to the provision of medical services for which medical indemnity cover is not provided by a public sector organisation (i.e. that is not employer-indemnified) and where that cover is for treating private patients only.
What this means for you is that you do not need to include in the calculation of your gross medical income all the services which you undertake and for which you are fully indemnified by your public sector employer, as your employer is covering the cost of your indemnity insurance for these services and there is no financial cost to you.
However, if you also undertake private medical services for which you have obtained your own medical indemnity insurance cover from a medical indemnity insurer, you must include all billable income from these services as part of your estimated gross medical income.
What if I don't know what my employer covers me for?
You will need to ask your employer or check your contract of insurance to find out what you are covered for under your employer-indemnified medical indemnity cover contract. Your employer is required to provide this information to you so this should be a straightforward process.
What if I'm not sure of the circumstances/risks for which my insurer covers me?
You will need to ask your insurer what they cover you for or check your contract for details of your cover. Your insurer will have the details of your cover and will be able to provide you with this information.
What happens if I have both private and employer-indemnified medical indemnity cover?
You need to know what your employer and own insurance cover includes.
- For all services (and therefore all billings) that are covered by your employer, you do not need to include these as part of your gross billings, as the PSS does not apply for cover which you are receiving at no financial cost to you.
- For all services (and therefore all billings) that are covered by your private medical indemnity policy with your insurer, you must include these as part of your gross billings.
If your practice is based primarily on public billings, but you obtain medical indemnity cover for some private medical services, which are not indemnified under a right to private practice agreement, you must include the billings that relate to this cover as part of your gross billings. In order to receive PSS for this type of cover, your estimated and actual billings must exceed $1,000 for the premium period. What this means for you is that if you obtain private medical indemnity cover from your insurer for any private work that you do outside your employer-indemnified cover, and this is not indemnified by your employer, you must include this as part of your gross medical income. However, if your billings for this type of cover do not exceed $1,000 for the premium period, you are not entitled to receive PSS for that period.
Why is my gross medical income based on my billings and not my salary?
All medical services (and therefore all your billings) for which you are indemnified by a medical indemnity insurer must be included as part of your gross medical income, as this is what you are liable for should there be a claim against you in the future.
Your insurance premium is risk-rated, which means that it is based on the level of risk involved in your specialty, and your risk is based on all the medical services that you provide. Therefore, the PSS is based on income from all the medical services billed, and not income retained by you.
What is the Premium Period?
The premium period is 12 months. Most medical indemnity insurers have a premium period of 12 months from 1 July to 30 June. If a medical practitioner is indemnified for only part of a premium period, the PSS entitlements will be calculated based on the income and gross indemnity costs for that period.
What are the medical practitioner's obligations with the PSS?
The medical indemnity insurer will write to medical practitioners to explain what they need to do to be eligible to participate in the PSS. Some have this information on their website.
The main thing to know is that by providing information on estimated and actual income, the medical practitioner is consenting to participate in the PSS, including sharing the relevant information with the Government for administration and for any audits that may be conducted. Medical practitioners need to provide all of the requested information to the medical indemnity insurer in order for an accurate calculation of PSS entitlement to be made. This also assists with meeting Commonwealth auditing requirements.
The information needs to be as accurate as possible, as there are provisions to recover any payments of PSS that are based on inaccurate information.
Medical practitioners will need to notify their medical indemnity insurer of changes to their circumstances such as if, their income estimate changes during the premium period or if a medical practitioner changes speciality. The medical indemnity insurer will re-invoice the medical practitioner and adjust the premium and PSS accordingly.
Which medical indemnity insurers offer the PSS?
Currently, there are only six medical indemnity insurers that offer the PSS. They are:
- Avant Insurance Limited ACN 003 707 471;
- Berkshire Hathaway Specialty Insurance Company ARBN 600 643 034;
- Guild Insurance Limited ACN 004 538 863;
- MDA National Insurance Pty Ltd ACN 058 271 417;
- Medical Insurance Australia Pty Ltd ACN 092 709 629; and
- MIPS Insurance Pty Ltd ACN 089 048 359.
