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GPs' seniority payments deciphered

Ensuring you are being paid the right seniority income requires some sleuthing.

Seniority payments are paid to GP principals who are in partnership, single-handed or shareholders in a limited company with GMS contractor status, to reward them for their experience and length of NHS service.

You need to have been a partner (or shareholder) in a practice for at least two years.

If a GP joins a practice as a partner and has been a principal elsewhere for two years, they will be entitled to receive seniority from the day they join their new partnership.

The amount you are eligible for depends on how many years of reckonable NHS service you have accumulated and also on the level of your NHS pensionable profit for the year.

Salaried GPs are not eligible to receive seniority; their experience and length of NHS service should be reflected in their salary package.

What about PMS?

PMS GP principals are entitled to seniority pay but the rules for them are not straightforward.

At the start of the 2004 GMS contract, PMS practices were given a choice: they could either continue to receive the historic amount of seniority pay in their baseline funding or it could be based on actual years of NHS service.

At the time, most practices would have taken the option giving them the higher level of payment.

If a PMS practice is receiving the historic amount in its baseline funding, it needs to consider how to share this out among the partners.

Reckonable NHS service

Reckonable NHS service is based on the number of years you have worked as a doctor in the NHS, not just as a GP principal.

Reckonable service also includes years worked in the public health system of another European Economic Area (EEA) member state - see the European Union website at europa.eu/ - and as a medical officer in the prison service or armed forces.

It starts from the date you first registered with the GMC (be this temporary, provisional, full or limited registration) or with an equivalent authority in an EEA member state.

Breaks in service must be excluded when working out your years of reckonable service.

Seniority payments
  • Check with your PCO the date your reckonable NHS service started and calculate your reckonable years.
  • Check that you are actually getting seniority pay - especially if you have changed partnerships - if you have been a GP principal for at least two years.
  • Check how much you should be receiving: see the 2012/13 seniority payments table.
  • Check your end-of-year NHS pensionable profit certificate and calculate whether you should receive the maximum payment, 60% or nothing at all.
  • Compare how much you think should get and the amount actually paid. If there is a discrepancy, contact your PCO.
  • Make sure provisions are made for potential seniority clawbacks in the final accounts for partners who are leaving.

Will I get the maximum?

Whether you are entitled to receive the maximum seniority pay for the year in relation to your reckonable service will depend on your actual NHS pensionable profit (or income) and how this compares to the national average.

Actual NHS pensionable profit is the amount declared on your end-of-year pension certificate.

If this exceeds two thirds of the national average, you will receive the maximum amount for your years of service to date.

If it is between one third and two thirds of the national average, you will receive only 60%; if it is below one third of the average, you will receive zero seniority pay.

Click on the image to enlarge

Average profit

National average profit is set by dividing the aggregate of NHS pensionable profit earned by all the GP principals in the country by the number of whole-time-equivalent GP principals.

As the actual figure for each year is not known until a few years later, an interim average is issued.

Also, you will not know what your final NHS pensionable profits are until the annual accounts and your end-of-year certificate have been completed. Therefore your primary care organisation (PCO) calculates your seniority entitlement based on the estimate of pensionable profit that your practice submits at the start of the NHS year (1 April) and compares this to the interim average figure - see the table of estimated and actual profit figures.

As the amount paid to a GP for a year is based on estimated NHS pensionable profits and average GP earnings, the PCO makes adjustments (clawbacks or top-ups for overor underpayments) when the actual national average figure is published.

What if a partner leaves?

As the final national averages are not known until a few years later, your practice could find itself facing the difficult task of clawing back seniority pay from a former partner.

To avoid this as far as possible, in the year a partner will be leaving, the amount of their seniority entitlement should be reviewed before they go.

If they have been paid too much, the practice should make a provision in the accounts for the clawback.

  • Jenny Stone is a partner at specialist medical accountants Ramsay Brown & Partners, www.ramsaybrown.co.uk.

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