New financial year, new obligations: What medical practice owners need to know

A new financial year always brings change, but for medical practice owners, this year the list is longer than usual.

From superannuation reforms and payroll obligations to changing Medicare billing requirements, practice owners have several new compliance requirements to navigate alongside rising employment costs and ongoing pressure on margins.
While each change may seem manageable on its own, together they have the potential to affect cashflow, operations and everyday administration.

Here are the key changes every medical practice owner should have on their radar…

1. Medicare assignment of benefit requirements have changed

On 1 July 2026, the government rolled out a new assignment of benefit process, aimed at streamlining and digitising Medicare billing for bulk billed and simplified billing services.

Replacing the traditional DB4 paper form, the new system mandates a comprehensive dataset on every assignment of benefit, with a strict two-year record retention rule. Where a patient changes to a new doctor, even within the same practice, a new form is required every time.

Understandably, the additional red tape for already stretched administrative teams was met with significant industry pushback, leading the government to introduce a one-year transition period.

Until 30 June 2027, practices will be able to obtain verbal consent for assignment of benefit, with certain patients permitted to sign an “enduring AoB agreement,” valid for 12 months and bypassing the need to physically sign a new form at every appointment.

What practice owners should do: The transition period is only temporary, so it’s important to understand what needs to change from an admin perspective and how it can be realised with minimal disruption. This might include staff training or practice software updates to achieve full compliance before the transition period ends.

2. Payday Super has arrived

Another compliance change with a soft grace period until 30 June 2027 is Payday Super, which officially started on 1 July this year.

Practices are now required to pay employee super in line with regular payroll instead of quarterly. For practices accustomed to using these funds to assist with cashflow throughout the quarter, the need to have the money land in an employee's super fund within seven business days of payday could be a difficult shift.

While the grace period will see some enforcement relaxation from the Australian Tax Office, it’s worth keeping in mind that penalties for non-compliance are substantial. Missing the seven-day window will eventually trigger the severe, non-deductible Superannuation Guarantee Charge with daily compounding interest.

What practice owners should do: If you haven’t already, it’s time to align your payroll practices with the new requirements. If this will seriously impact cashflow, consider having your accountant conduct a cashflow review to determine where changes could be made to ensure the business stays financially sustainable.

3. Super is now calculated using qualifying earnings

Another key change to super is the replacement of ‘ordinary time earnings’ with ‘qualifying earnings’ when calculating Superannuation Guarantee obligations.

While most employee payments will be similar to what they were, casual staff or contractor payments could differ significantly. For example, businesses that hire independent contractors – such as tenant doctors, locums or allied health professionals – may need to track their invoices as ‘qualifying earnings’ and pay 12% super into the contractor's chosen fund within the standard seven-day window. This applies where the contractor meets the extended definition of an employee under superannuation laws, with Payday Super rules no longer allowing for the use of an ABN to exempt them.

Practices that simply maintain existing payroll practices may risk underpaying or overpaying super, which again could have financial consequences.

What practice owners should do: Confirm your payroll software has been updated and check that all earnings categories are mapped correctly before processing future pay runs.

4. Rising employment costs are putting pressure on practice margins

Another change impacting practice cashflow is the 4.75% increase in award wages from 1 July, 2026.

Practices must pass on this increase to all practice employees – from receptionists to nurses, employed allied health professionals and technical staff. Registered and enrolled nurses in GP practices will also see an additional structural pay increase from 1 August, while allied health professionals are set to receive their own pay rate increase from 1 October. 

With the annual indexation of Medicare benefits sitting at just 2.6%, this moderate increase falls well short of the rising costs of running a medical practice, and has understandably led to criticism from across the industry.

Many clinics will need to use this new financial year to review their private and mixed-billing fee gaps if they want to remain in the green.

What practice owners should do: Stay abreast of changing award rates and take the time to forecast the impact on budgets and cashflow. This will help you determine if pricing strategies will need to change now or in the near future.

5. Proposed reforms to trust structures

While they haven't become law, practice owners and medical professionals who operate through discretionary trusts will need to keep a close eye on the government's proposed trust taxation reforms.

These could significantly change how trust income is taxed and may affect common structures, such as the retention of profits and any use of bucket companies.

For example, if your medical practice uses a service trust that clears $100,000 in profit, you might currently send that money to a corporate "bucket company" to cap your tax bill at 25% or 30%. Under the proposed rules, the trust itself would be hit with a mandatory 30% flat tax on the profit, and because bucket companies would be blocked from claiming tax credits on those funds, the money would effectively be taxed twice.

As an extra hurdle, the ATO’s crackdown on family income splitting means any clinic profits distributed to a spouse or adult children who don’t actually work in the business could attract severe ATO audit penalties.

Finally, practice entities that help doctors set up trusts or companies, act as trustee or director for practitioner entities, or provide a registered office address for multiple entities should also be aware of new anti-money laundering rules.

What practice owners should do: Speak with your adviser before making structural decisions and monitor developments as further details become available.

How RSM can help

With all of these changes unfolding, it’s imperative to understand how they affect your practice’s operations and finances.  
RSM’s dedicated Medical Services team works closely with GP clinics and medical practice groups to help them navigate times of change and make informed decisions to ensure their longevity. 

We can provide:

• Financial health checks
• Forecasting and scenario modelling
• Compliance guidance
• Practice software and efficiency reviews
• Pricing strategy support

We have also found Business for Doctors to be an important resource for practice owners who wish to help their doctors understand how to bill more effectively.

To learn more, or to organise a free practice health check, please contact our National Director of Medical on (02) 6057 3000 or your local RSM office.