PCSE Seniority Payments Reconciliation Exercise
Written: October 2023
I am writing to all practices who may receive, or have received, letters from PCSE regarding this exercise.
Seniority Payments were made to partner GPs only and were based on length of NHS services and received profit. The seniority scheme closed to new members on 1st April 2014, and was then phased out over a six-year period, with the last payments made prior to 31st March 2020. Seniority funding was diverted to Global Sum, as part of the 2013/14 Contract Agreement.
Seniority payments were based on thirds of average partner income, with no payment being made if a partner drew under a third of average income, 60% between one-third and two-thirds, and GP partners receiving over two-thirds income receiving a full payment. Entitlement to seniority commenced after eight years’ service, and payments were made quarterly on account, based in an interim estimate of Seniority entitlement The actual entitlement to seniority pay depended on the Final Seniority Factor [FSF] and there was a significant time-lag, normally four years, in calculating this. The FSF for financial years 2017/18, 2018/19, and 2019/20 have now been published.
Because the entitlement to seniority pay can only be known once the FSF is calculated, this adjustment in actual pay may result in a potential under or overpayment. Practices are now being contacted with this calculation. NHS England and PCSE are now reviewing the adjustments made for years 2013/14, 2014/15, and 2016/17; this exercise is not completed but practices will be contacted once this has occurred.
Practices should be able to obtain further details via the online form link, or refer to the PCSE FAQ pages.
Due to the time elapsed, these adjustments may relate to GP partners who have now retired, left the practice, or who are possibly even deceased. They also may relate to practices which have now merged or closed. The LMC does not believe practices should be contacted about practices which have closed, and patients re-registered, as opposed to mergers which have brought together two existing practice lists.
Current partners should advise their accountants of the information that has been received from PCSE, as the amounts can be challenged (via the online form). Retired partners can be contacted if the adjustment refers to their seniority payments whilst they were partners; if partners have died, it may be necessary to contact the beneficiaries of their estate.
Colleagues may find, because these reconciliations were always known to be significantly in arrears, there is a reference to such financial arrangements on retirement or resignation within the Partnership Agreement at the time, which would be helpful in such discussions.
This exercise is undoubtedly going to create a need to liaise with retired colleagues in a limited proportion of cases, and the matter may not always be covered by written arrangements. The LMC recommends that practices first ask their accountants for advice in terms of PCSE figures, raising a query if appropriate, which may not be a value-for-money exercise if the variance is small. Once figures are agreed, current partners should if necessary inform any retired previous partners (including partners of a then different practice if a merger has occurred) of this information. It a partner is deceased, clearly this may be a more sensitive exercise but at the least the information provided by PCSE should be made available to beneficiaries of the partners estate, if known and contactable. If there is no way of doing so, PCSE should be informed.
Looking into the LMC records, I see I wrote to all practices in October 2015 as below:
Colleagues should note that, because payments are based on interim seniority figures, and the HSCIC confirms final figures up to four years in arrears, final adjusting payments may not be made until 2024, when the world may be a very different place.
It does indeed feel as if the world is now in a very different place.
If colleagues have any queries regarding this process, please contact the LMC Office.
Dr Julius Parker, Chief Executive
Written: 17 April 2024
Update: PCSE Seniority Payments Reconciliation Process
Colleagues will recall that last Autumn many practices were contacted by PCSE, which was undertaking a reconciliation exercise for seniority payments made in financial years 2017/18, 2018/19 and 2019/20. Not all practices will be affected by this exercise.
This process was then delayed because of the need for further validation exercise. This has now been undertaken for all but a very small number of practices.
As a result of the validation, the figure your practice (if affected) will now receive (which may be either positive or negative) may be different to the figure sent in October 2023. The intention is to balance practice payments in the June contract payment run. Across England approximately 1500 practices are due a deduction, and just under 1000 practices will receive a positive adjustment.
PCSE are making special arrangements for practices who believe a one-off financial deduction in June would place their practice at risk of financial hardship. If this is the case, you should complete the request for a payment plan via the email you have received. There is a short window to complete this, as it should be sent to PCSE by 23rd April 2024. PCSE will set up a payment plan for the remaining ten months of the financial year (June 2024 to March 2025) in which the total deduction will be subdivided into ten equal monthly deductions.
The LMC understand from PCSE that this payment plan will be forwarded to the practice’s ICB: SSLMCs will contact all local ICBs to advise them that, should the ICB consider such a payment plan is unnecessary, they should contact both the practice and the LMC. However, it is difficult to understand any ICB drawing this conclusion.
There is further information regarding seniority payments in my previous letter of 30th October 2023 and also via the PCSE website at: - Seniority payments | PCSE (england.nhs.uk)
PCSE and NHS England both recognise that, having initiated this exercise and then withdrawn it for further validation, there may be some scepticism about the revised figures. This is a complicated exercise as the total figure sent to practices is an aggregate one, covering all partners at the practice entitled to receive seniority payments during the three years involved, and this may include both positive and negative adjustments. Practices can request further information from PCSE via the online link above.
Due to the time that has elapsed, these adjustments may relate to GP partners who have now retired, resigned from the practice, or who are even deceased. They may also relate to practices which have now merged or closed. GPC England does not believe current practices should be contacted about practices that have closed, and patients dispensed to re-register elsewhere, as opposed to mergers, which have brought together previous existing practices.
Practices may find that, because seniority payment reconciliations were always made some years in arrears, there is reference to such arrangements on retirement or resignation within a Partnership Agreement. There may also be similar arrangements detailed in Merger Agreement when this has occurred.
However, this exercise is undoubtedly going to create some work for practices: the LMC recommends that in the first instance, practice accountants are informed of the information received from PCSE. Obviously, past partners can be contacted, but this needs to be a value-for-money exercise as some adjustments (whether positive or negative) are small, in absolute terms, and may not justify a complicated accountancy exercise. Current partners can certainly inform previous partners (including partners of a then different practice if a merger has occurred) of the information they have received from PCSE. If a partner has died, then this may be a more sensitive exercise in terms of contracting the beneficiaries of their estate. If this isn’t possible, PCSE should be informed.
The LMC also understands that PCSE will eventually be in touch with practices affected by the 2013/14, 2014/15 and 2015/16 and 2016/17 financial years, although any adjustments related to these years are likely to be smaller in absolute terms. I do not have a date for this exercise. I hope this background is helpful, please contact the LMC if you have any queries.
Dr Julius Parker Chief Executive
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Updated on Wednesday, 17 April 2024
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