New Tax ruling on incentives received by Registrars under GP RIPS
In the last month, some rural workforce agencies, the Australian Medical Association (AMA) and the Rural Doctors Association of Australia (RDAA) have raised with the Department of Health and Ageing concerns regarding the withholding of tax from incentive payments to medical practitioners under the new General Practice Rural Incentive Program (GPRIP) due to commence on 1 July 2010.
Based on a tax ruling from the Australian Taxation Office (ATO) in November 2009, the Department had advised GPs and Registrars in May that GPRIP that incentive payments would be subject to withholding of Pay As You Go tax at time of payment at a rate of 46.5%.
The Department took seriously the concerns raised by stakeholders and sought urgent clarification and further advice from the ATO. The ATO reviewed the earlier ruling and, on 31 May 2010, issued a new ruling that the Department does NOT have an obligation to withhold amounts from GPRIP payments paid to doctors and GP registrars.
Hence, tax will not be withheld from GPRIP incentive payments to medical practitioners. Recipients will, of course, need to declare such payments for tax purposes, and are advised to seek advice from their financial adviser, accountant or the ATO regarding their own tax arrangements.
The Minister for Minister for Indigenous Health, Rural and Regional Health and Regional Services Delivery, the Hon Warren Snowdon MP, has written to stakeholder agencies informing them of the ATO’s ruling. Updated information regarding the new ruling is available online at www.doctorconnect.gov.au .
The Department appreciates the matter having been brought to its attention by stakeholder agencies and is pleased that, with the assistance of officers from the ATO, this matter has been successfully resolved.
AMA Media Release. Click here
Letter from The Hon Warren Snowdon MP, Minister for Indigenous Health, Rural and Regional Health and Regional Services Delivery addressing the issue. Click here
A new version of the 2010 training year fact sheet is now available from the AGPT website .
The changes in this version are:
- Options to fulfil the pathway requirements have been expanded to include 6 months in an Indigenous health training post in an AMS, and 12 months in a RA1 non-capital city location
- Information included on the deadline to submit claims under RRIPS
- The new tax ruling for GPRIP
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