PraxisMutual · Indemnity

Government support, explained

The Commonwealth schemes behind every Australian doctor's premium

Four Australian Government schemes quietly underpin medical indemnity in this country. They keep premiums affordable, stabilise the market and provide free cover when a practitioner retires. Here is how each one works — in plain English, and in detail.

The safety net

A shared framework, not a product feature

Australia operates a suite of Commonwealth schemes created in the wake of the 2002–03 medical indemnity crisis. They are an Australian Government initiative, owned by the Department of Health, Disability and Ageing and administered by Services Australia. Medical indemnity insurers administer parts of them on the government's behalf — passing the benefits through to the doctors they cover.

Because the schemes absorb the catastrophic tail and the cost of run-off cover, insurers do not have to fully price those risks into every premium. The result is cover that is more affordable and far more stable than an open market would allow. Praxis applies these schemes to a member’s premium and eligibility — the Commonwealth owns and funds them.

The four schemes do four different jobs. Two of them — the Premium Support Scheme and the Run-off Cover Scheme — touch the practitioner directly, as a subsidy and as a levy. The other two — the High Cost Claim Scheme and the Exceptional Claims Scheme — work quietly between insurers and the Commonwealth to keep the base premium lower and the largest claims met. Below, each scheme has its own section: what it is, who it helps, how it affects your premium and cover, and how Praxis administers it.

Four schemes, one purpose

Together, PSS, ROCS, HCCS and ECS make medical indemnity affordable to buy, safe to rely on, and available even after a doctor leaves the profession.
This information explains how Australia’s medical indemnity framework and government schemes work in general. Eligibility and benefits depend on your circumstances and the current scheme rules — speak with our team about how they apply to you.

Scheme by scheme

What each scheme does, at a glance

Each scheme tackles a different problem — affordability, the claims-made tail, large claims, and catastrophic claims that exceed the policy limit. Start here, then read the detailed section on each below.

PSS

Premium Support Scheme

A Commonwealth subsidy paid to the doctor — via their medical indemnity insurer — to keep high premiums affordable.

  • Eligible when gross indemnity costs exceed 7.5% of gross private medical income
  • Also open to procedural GPs working in designated rural areas
  • 60% of the gap above the 7.5% billings threshold is subsidised
  • 75% subsidy for eligible rural procedural GPs

Who it helps

Doctors whose indemnity is disproportionately expensive relative to their billings, and rural procedural GPs.

ROCS

Run-off Cover Scheme

Free, Commonwealth-funded cover for claims made after a doctor permanently stops private practice — solving the claims-made tail problem.

  • Covers 100% of eligible claims once a practitioner permanently ceases practice
  • Applies on retirement, permanent disability, parental leave, death or leaving the workforce
  • No ongoing premium for the eligible retired or ceased practitioner
  • Funded by the ROCS support payment — a levy of roughly 5% of premium collected from working doctors

Who it helps

Retiring, deceased, disabled or permanently-ceased practitioners who would otherwise need to keep buying run-off cover.

HCCS

High Cost Claim Scheme

The Commonwealth reimburses the medical indemnity insurer for half of a large claim above a set threshold, up to the limit of indemnity.

  • Commonwealth meets 50% of eligible payouts above the threshold
  • Threshold is $0.5 million (in force since 1 July 2018)
  • Caps insurer exposure on large but non-catastrophic claims
  • Works in the background — it lowers the underlying risk premium rather than appearing as a line item

Who it helps

Operates between insurers and the Commonwealth; doctors benefit through lower, more stable premiums.

ECS

Exceptional Claims Scheme

Covers 100% of an eligible claim above the practitioner's limit of indemnity — the catastrophic tail that exceeds the policy sum insured.

  • Meets 100% of eligible costs above the limit of indemnity
  • Protects doctors from personal exposure on a mega-claim that blows through their cover
  • Provides legacy cover for some allied health professionals
  • Means a single catastrophic claim should not personally ruin a practitioner

Who it helps

Doctors in private practice facing a claim larger than their policy limit.

In detail

Each scheme, in full

What it is, who is eligible, how it affects your premium and cover, and how Praxis administers it on the Commonwealth's behalf.

PSS

Premium Support Scheme

The subsidy that keeps a high premium proportionate to what you earn.

What it is

The Premium Support Scheme is a Commonwealth subsidy designed for the small group of doctors whose indemnity premium is large relative to the income their practice generates. Rather than letting an expensive specialty or a low-billings year price a practitioner out of cover, the scheme meets a share of the gap so the net premium stays proportionate to private medical income. It is owned by the Department of Health, Disability and Ageing and administered by Services Australia; insurers handle the application and the year-end reconciliation on the government's behalf.

Eligibility

  • Gross medical indemnity costs that exceed 7.5% of gross private medical income, or
  • Procedural GP work performed in a designated rural area, or
  • Certain transitional categories, including some doctors who have recently retired from private practice.
  • “Gross private medical income” means total billings across all practice requiring indemnity — Medicare, DVA, patient, workers’ compensation, CTP and third-party — measured before expenses and tax.

How it affects your premium & cover

PSS is the one scheme that most visibly reduces what an eligible doctor pays. Once eligibility is established, 60% of the difference between the indemnity cost and the 7.5%-of-billings threshold is subsidised; for eligible rural procedural GPs the subsidy rises to 75% of the relevant gap. The subsidy is applied against the premium so the doctor pays the reduced amount, and it appears as a distinct deduction rather than being hidden inside the base rate.

How Praxis administers it

Praxis treats PSS as part of the quote, not a separate errand. A member who looks eligible is flagged during the application; we collect the billings and provider details the scheme requires, apply the estimated subsidy to the premium, and then reconcile it against actual billings after the policy year so the final figure is correct. Because the scheme is opt-in and turns on a billings test, the subsidy shown before reconciliation is an estimate, confirmed on application.

ROCS

Run-off Cover Scheme

The reason claims-made cover doesn’t leave you exposed when you stop.

What it is

Medical indemnity is written on a claims-made basis, which means a policy responds to claims first made and notified while it is in force. On its own, that creates a tail problem: when a doctor stops practising, claims about past care can still surface for years, but there is no live policy to answer them. The Run-off Cover Scheme solves this. The Commonwealth funds 100% of eligible claims against practitioners who have permanently left private practice, so the long tail is covered without the retired doctor having to keep buying run-off cover.

Eligibility

  • Permanent retirement from private practice,
  • Permanent disability that ends practice,
  • Maternity or parental leave that becomes a permanent cessation,
  • Death of the practitioner, with cover continuing for their estate, and
  • Permanently leaving the medical workforce.
  • The cover is for the tail of incidents that occurred during the insured period — it is not a way to keep practising without a current policy.

How it affects your premium & cover

For the eligible practitioner, ROCS removes what would otherwise be a significant retirement cost. There is no ongoing premium for the retired or ceased doctor. The scheme is funded collectively through the ROCS support payment — a levy of roughly 5% of premium that working doctors pay while they are still practising — so the cost of everyone’s tail is shared across the profession rather than landing on the individual at the worst possible time.

How Praxis administers it

When a Praxis member permanently ceases practice, we administer their move into ROCS so the transition is seamless — the member does not have to negotiate a separate run-off policy or face a tail bill. While a member is still working, the ROCS support payment is added to their premium and shown as its own line, so the levy that funds the scheme is never buried.

HCCS

High Cost Claim Scheme

The background reinsurance that keeps large claims from inflating every premium.

What it is

The High Cost Claim Scheme is a reinsurance-style arrangement between the Commonwealth and medical indemnity insurers. When an eligible claim exceeds a set threshold, the Commonwealth reimburses the insurer for 50% of the amount above that threshold, up to the practitioner’s limit of indemnity. Because insurers no longer have to carry the full weight of large but non-catastrophic claims alone, the risk premium that sits underneath every policy is lower than an open market would require.

Eligibility

  • Operates between the insurer and the Commonwealth rather than requiring an application from the doctor.
  • The threshold has been $0.5 million since 1 July 2018; the Commonwealth meets 50% of eligible costs above it.
  • Reimbursement applies up to the practitioner’s limit of indemnity — above the limit, the Exceptional Claims Scheme takes over.
  • A parallel arrangement supports eligible allied health professionals.

How it affects your premium & cover

HCCS does not appear on an invoice. Its effect is structural: by capping insurer exposure on the costly middle band of claims, it allows the base premium to be set lower and to stay more stable from year to year. Doctors feel it as a price that does not lurch upward every time the profession sees a run of large settlements.

How Praxis administers it

Praxis prices cover on the understanding that HCCS sits behind it. The scheme feeds into the risk-rated base premium rather than appearing as a charge, which is why members benefit from it without ever filling in a form. We manage the reconciliation with the Commonwealth on eligible claims as part of handling the matter.

ECS

Exceptional Claims Scheme

The catastrophic backstop above your limit of indemnity.

What it is

Even a $20 million limit can, in rare cases, be exceeded by a single catastrophic claim. The Exceptional Claims Scheme is the backstop for exactly that situation: the Commonwealth meets 100% of the cost of an eligible claim above the practitioner’s limit of indemnity. It exists so that a doctor in private practice is not personally exposed to the part of a mega-claim that blows through their policy, and it provides legacy cover for some allied health professionals.

Eligibility

  • Applies to eligible claims that exceed the practitioner’s limit of indemnity.
  • Covers 100% of eligible costs above that limit — there is no co-payment by the doctor for the excess.
  • Aimed at doctors in private practice facing a claim larger than their policy sum insured.
  • Provides legacy cover for certain allied health professionals.

How it affects your premium & cover

Like HCCS, ECS works in the background and does not appear as a line item. Its real value is reassurance: a practitioner choosing a high limit of indemnity knows that even the once-in-a-career claim that exceeds it will not reach their personal assets. That certainty is part of why claims-made cover at a sensible limit is enough, rather than needing to insure for theoretically unlimited amounts.

How Praxis administers it

Praxis sets out limit-of-indemnity options on the basis that ECS answers for the catastrophic tail above the chosen limit. Members do not apply for ECS; it is part of the Commonwealth framework that underpins the market, and we manage any interaction with it when handling a claim of that size.

How the schemes touch your premium

One premium, four schemes — a worked illustration

Follow a single practitioner's premium from the risk-rated base to the figure they pay, and watch where each scheme acts. Two schemes shape the base; one adds a levy; one deducts a subsidy.

  1. 01

    Risk-rated base premium

    Set by HCCS & ECS

    The starting base is already lower and steadier than an open market would allow, because the High Cost Claim Scheme caps insurer exposure on large claims and the Exceptional Claims Scheme removes catastrophic-tail risk above your limit. Neither shows as a charge — they shape the number you start from.

  2. 02

    + ROCS support payment (~5%)

    Added

    A levy of roughly 5% of premium is added to fund free run-off cover for the whole profession. It is the cost of knowing that, when you eventually stop practising, the tail of past incidents is covered at no further premium.

  3. 03

    + GST and state stamp duty

    Added

    Goods and services tax and your state or territory’s stamp duty apply, as they do to any general-insurance product. These are taxes, not scheme costs, but they sit between the scheme adjustments on the way to your total.

  4. 04

    − PSS subsidy (if eligible)

    Deducted

    If you qualify for the Premium Support Scheme, 60% (or 75% for an eligible rural procedural GP) of the gap above the 7.5%-of-billings threshold is deducted, lowering what you actually pay. The subsidy is reconciled against your real billings after the year ends.

The net effect

Of the four, only the ROCS support payment and a PSS subsidy ever appear on an invoice — one as an addition, one as a deduction. HCCS and ECS never show up directly; they are the reason the base premium is lower and more stable in the first place. The figure you land on is an estimate, confirmed on application.
See these lines appear, recalculating live, in our quote builder, or read the full pricing breakdown.
Registration requirement

In Australia, you cannot legally practise without indemnity cover

Under the Health Practitioner Regulation National Law, the Medical Board of Australia — through AHPRA — sets a Registration Standard for Professional Indemnity Insurance. Every registered medical practitioner must declare, on registration and at each annual renewal, that they will not practise without appropriate PII arrangements covering all aspects of their practice.

The standard sits alongside the Commonwealth schemes rather than being one of them. The schemes make compliant cover affordable and available; the registration standard makes holding that cover a condition of practising at all. The requirement applies to registered practitioners other than those with non-practising registration, and does not apply to students.

Cover with an authorised insurer

The standard requires cover from an APRA-authorised insurer that meets the minimum product standards in the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003.

Appropriate retroactive cover

Cover must extend back over prior practice in Australia, so historic incidents are not left uninsured.

Evidence on demand

Practitioners may be asked to produce evidence of cover and must retain documentary proof for five years.

Good to know.Cover in this market must meet AHPRA’s PII registration standard. Praxis cover is designed to satisfy that standard — your certificate of cover and the Product Disclosure Statement set out the exact terms.

Common questions

Government schemes, answered

The schemes can be confusing because they operate between doctors, insurers and the Commonwealth. Here are the questions members ask most.

Are these schemes Praxis's products?

No. The Premium Support Scheme, Run-off Cover Scheme, High Cost Claim Scheme and Exceptional Claims Scheme are Australian Government schemes, owned by the Department of Health, Disability and Ageing and administered by Services Australia. Medical indemnity insurers like Praxis administer parts of them on the government's behalf — applying the benefits to a member's premium and managing the eligibility and reconciliation in the background.

Why do these schemes exist?

They were introduced after the 2002–03 medical indemnity crisis, when the collapse of a major insurer threatened the affordability and availability of cover. The schemes let insurers avoid fully pricing the catastrophic and run-off tail, which dampens and stabilises premiums across the whole profession.

How does the Premium Support Scheme actually reach me?

PSS is opt-in. An eligible doctor applies (usually through their insurer), declares estimated private billings and provider details, and the subsidy is applied against their premium. After the policy year, the subsidy is reconciled against actual billings. Eligibility turns on the 7.5%-of-billings test or rural procedural GP status, and the subsidy shown beforehand is an estimate, confirmed on application.

Do I have to pay for run-off cover when I retire?

For eligible practitioners, the Run-off Cover Scheme provides that tail at no ongoing cost. It is funded collectively by the ROCS support payment — a levy of around 5% of premium that working doctors pay while they are still practising. When a Praxis member permanently ceases practice, we administer the move into ROCS so there is no separate tail policy to arrange.

Will I see HCCS and ECS on my invoice?

Generally no. The High Cost Claim Scheme and Exceptional Claims Scheme sit behind the scenes between insurers and the Commonwealth. You feel them as lower, more stable premiums and as reassurance that even the largest claims are met — not as separate charges.

What's the difference between HCCS and ECS?

Both deal with large claims, but at different points. HCCS shares the cost of a large claim that sits below your limit of indemnity — the Commonwealth meets 50% of eligible costs above a $0.5 million threshold, up to your limit. ECS picks up where your limit ends: it meets 100% of an eligible claim above your limit of indemnity. Together they cover the costly middle band and the catastrophic tail.

Do these schemes cover allied health professionals?

The schemes are centred on medical practitioners, but there are parallel arrangements for eligible allied health professionals — including a high-cost claim arrangement and legacy exceptional-claims cover. Whether a particular practitioner is in scope depends on the current scheme rules, which is why eligibility is always checked against your circumstances rather than assumed.

Can the thresholds and percentages change?

Yes. The thresholds, levy rate and subsidy percentages are set by regulation and reviewed by government from time to time — for example, the High Cost Claim Scheme threshold moved to $0.5 million on 1 July 2018. We apply the rules in force for your policy year, which is one reason any figure here is general context rather than a fixed promise.

This information explains how Australia’s medical indemnity framework and government schemes work in general. Eligibility and benefits depend on your circumstances and the current scheme rules — speak with our team about how they apply to you.

See how the schemes shape your premium

Build a quote and watch the ROCS support payment, GST, stamp duty and any PSS subsidy appear, line by line — or talk to our team about how the schemes apply to you.

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