Premium Support Scheme (PSS) - Frequently Asked Questions

This page displays answers to questions on the PSS from the viewpoint of doctors.

Page last updated: 29 June 2012

What is the Premium Support Scheme (PSS)?
How does the PSS work?
Who is eligible for the PSS?
Do doctors 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 doctors receive the PSS if they practise both publicly and privately?
What if a doctor 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 doctor's obligations with the PSS?

What is the Premium Support Scheme (PSS)?

The PSS is an Australian Government scheme that helps eligible doctors with the costs of their medical indemnity insurance. Eligible doctors see the benefit of the PSS through reductions in the level of premiums charged to them by their MII. The Australian Government makes payments to MIIs for the PSS.

The PSS was introduced on 1 January 2004, with payments commencing mid 2004.

How does the PSS work?

The PSS is designed to ensure that 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.

For premium periods starting before 1 July 2012, the PSS subsidises 80% of the cost of the premium beyond the 7.5% threshold.

For premium periods starting on or after 1 July 2012 and before 1 July 2013, the PSS subsidises 70% of the cost of the premium beyond the 7.5% threshold.

For premium periods starting on or after 1 July 2013, the PSS subsidises 60% of the cost of the premium beyond the 7.5% threshold.

For example, if a doctor's gross medical indemnity costs exceeded 7.5% of his or her gross private medical income by $1,000 in 2012-13, then the PSS would pay $700 (70%) of that and the doctor would only have to pay $300 beyond the threshold.

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 (RRMAs 3-7); or
  • A doctor who has applied for and has been deemed to be eligible for a subsidy under MISS (ie former MISS participants); or
  • A doctor who has retired from private practice, but continues to practice in the public sector.
N.B. A medical practitioner who does not receive any income from private medical practice during a premium period is not eligible for the PSS, unless they are practising only in the public sector and their contract of insurance provides retroactive or run-off cover for incidents relating to prior periods of private practice.

Do doctors have to apply separately for the PSS?

No. Doctors do not have to make a separate application to government for the PSS.

To be eligible for the PSS, doctors simply have to indicate their willingness to participate in the PSS and nominate an estimated income point to their insurer rather than nominating an income band when negotiating their annual medical indemnity premium.

It is necessary for this income point to be known so that the MII can determine if the 7.5 % threshold has been reached.

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 doctors and those for non-procedural GPs in similar circumstances (ie. Same location, same income, 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?

Doctors will need to provide their MIIs with the following information if they are to be considered for a PSS entitlement:
  1. estimated income for the premium period in which PSS is sought;
  2. costs payable to other insurers for run-off cover or retroactive cover in the premium period for which PSS is sought;
  3. the doctor's speciality;
  4. the doctor's provider number(s); and
  5. the doctor's practice address.
NB: MIIs may already have some of this information. MIIs will only be asking doctors for the information needed in order to apply the PSS. If a doctor chooses not to provide this information, the doctor will not be eligible for any PSS entitlements for that premium period.

NB: Doctors who receive the PSS must inform the MII of their actual income via a statutory declaration no later than 12 months after the end of the premium period 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 doctors receive the PSS if they practise both publicly and privately?

If the practice is primarily based on public billings and the doctor obtains medical indemnity insurance for some private medical services performed, the doctor 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. Top of page

What if a doctor is working as a medical practitioner part-time?

The MII will base the premium on the amount of money the doctor advises they expect to earn during the premium period. The MII 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 MII. These are 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 doctor 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, including 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 doctor or otherwise and before any apportionment or deduction of any expenses and/or tax. If as part of the doctor'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. The threshold is 7.5% of gross private medical income in indemnity costs. If you meet or exceed this threshold, you are eligible to participate in the PSS. 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 MII, 80 cents 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 on the basis of 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 as a result 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 PSS. 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 run-off for earlier private practice, you may be eligible to access 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 (ie 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. Top of page
 

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 straight forward 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 covers you for, and what your own insurer covers you for.
  • 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 MIIs have a premium period of 12 months from 1 July to 30 June. If a doctor 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 doctor's obligations with the PSS?

The MII will write to doctors 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 doctor is consenting to participate in the PSS, including sharing the relevant information with the government for administration and also for any audits that may be conducted. Doctors need to provide all of the requested information to the MII 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.

Doctors will need to notify their MII of changes to their circumstances such as if their income estimate changes during the premium period or if a doctor changes speciality. The MII will re-invoice the doctor and adjust the premium and PSS accordingly.

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.

The Department of Health and Ageing 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. Top of page