Financial Planning for Neurologists in Australia

Neurologists in private practice carry significant professional overhead - AHPRA specialist fees, ANZAN membership, MDO premiums, and diagnostic equipment costs all contribute to deductible expenses.

• AHPRA Medical Board specialist registration: ~$900–$1,000/yr for specialist registration in Neurology - fully deductible as a condition of earning income
• ANZAN membership: Australian and New Zealand Association of Neurologists - annual membership ~$700–$1,100/yr; ANZAN annual scientific meeting, ANZAN courses, and subspecialty meetings (epilepsy, movement disorders, stroke, neuroimmunology) - registration, travel, accommodation deductible where CPD purpose dominates; contributes to AHPRA 50hr/yr CPD requirement
• MDO premiums: Avant, MDA National, or Tego - neurology premiums typically $3,000–$10,000/yr; general neurologists at lower end; epilepsy surgery teams and procedural neurologists (botulinum toxin injections, lumbar punctures) at higher end; premiums fully deductible
• EEG and EMG equipment: Neurologists who own EEG and EMG machines deduct maintenance costs and depreciation (ATO effective life ~10 years); video EEG systems for epilepsy monitoring units are complex and expensive - $80,000–$200,000+; often leased to preserve capital
• Neuropsychological testing materials: Neurologists who perform bedside cognitive testing or own neuropsychological test materials - costs are deductible; standardised test kits require periodic refresh (standardisation updates)
• Telehealth and remote EEG reporting: Neurologists providing remote EEG reading services (teleEEG, especially for regional hospitals) deduct platform costs, secure clinical communication subscriptions, and proportional home office

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Neurology billing includes both cognitive services (consultations, bedside assessments) and diagnostic services (EEG reporting, EMG/nerve conduction studies, evoked potentials). The PSI analysis differs by income stream.

• Key MBS neurology items: 11000–11027 (EEG studies), 11300–11315 (EMG/nerve conduction studies), 11400–11412 (evoked potentials), and consultation items 110/116/132; neurology-specific procedural items include 18256 (botulinum toxin injection) - all assessable; MBS schedules updated November each year
• Solo neurologist consultation income = PSI: If a neurologist personally sees patients and bills under their own provider number, that consultation income is PSI - must flow to the individual regardless of company or trust structure
• EEG reporting income - key distinction: If the neurologist owns an EEG machine, employs a neurophysiology technician to conduct the studies, and then reports the studies, the technician's contribution may be sufficient to satisfy the business income test - this income may not be PSI; the technician's work is separate from the neurologist's personal reporting service
• Contracted EEG services: Neurologists who report EEGs for hospitals or private clinics (not owning the equipment, just providing interpretation) - this is a personal service (report writing requiring the neurologist's expertise) - likely PSI
• EMG labs: Similarly, if a neurophysiology laboratory employs multiple technicians and reports studies across multiple neurologists, the entity income may be business income rather than PSI
• Medicolegal and expert witness: All forensic neurology reports, independent medical examinations, and expert witness income is always PSI - cannot be diverted to a company or trust; the deductible expenses (research, report preparation) offset this income directly

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Neurologists with ownership interests in diagnostic neuroscience facilities (EEG labs, EMG labs, neuroimaging centres) have a separate income stream from their personal clinical services - this distinction is critical for tax structuring.

• Diagnostic facility income: Revenue from a neurophysiology laboratory (EEG/EMG/evoked potentials) operated as a business - the entity charges health funds or patients a facility or interpretation fee; this income belongs to the entity (company, trust), not the individual neurologist as PSI
• Neurologist as shareholder/partner: If the neurologist is an equity holder in the neurophysiology lab, their return from the facility is business income (dividends, trust distributions) - subject to normal income tax but NOT the PSI individual attribution rules
• Independence of the diagnostic service: The more the neurophysiology service operates independently of one neurologist's personal input (multiple neurologists reporting, employed technicians conducting studies, administrative staff managing billing), the clearer the business income classification
• Related party service charge: The neurologist's operating entity (providing clinical consultations) can pay the diagnostic lab entity for EEG/EMG studies performed on the neurologist's patients - the fee is deductible to the consulting entity; the lab entity distributes income to beneficiaries/shareholders
• ATO PS LA 2007/1: As with other medical professional service structures, fees charged by the diagnostic entity to the clinical entity must be at arm's-length market rates - not artificially inflated to shift income away from the PSI-attributed individual
• SMSF investment in diagnostic equipment: Some neurologists use their SMSF to own EEG/EMG equipment and lease it to their practice - provided the arrangement is at arm's-length and the equipment is not business real property (it is plant and equipment, not land and buildings), this is an in-house asset if the practice is a related party; complex structuring - specialist advice required

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Neurologists are high-income specialists subject to Division 293 from early in their consultant careers. The training history (neurology registrar + advanced training) creates carry-forward opportunities that are frequently overlooked.

• Division 293 at $250,000: Additional 15% on CCs - total 30%; still superior to 47% marginal rate; ATO assessment issued post-lodgement; pay personally or release from super
• Carry-forward contributions: Neurology training (4–5 years physician training + 2–3 years neurology advanced training) with registrar salaries creates years of unused CC cap; if TSB was under $500,000 at 30 June of the prior year, unused cap from 2018-19 to 2024-25 can be used in a catch-up contribution - potentially over $50,000 in a single year
• CC cap trap at high income: At $300,000 income, SG = $34,500 - $4,500 over the $30,000 CC cap; optimal salary to cap SG at $30,000 = ~$261,000; above this, consider taking additional income as dividends or trust distributions rather than salary
• SMSF with business real property: Neurologists who own their consulting rooms can structure these as BRP in an SMSF - rent paid to SMSF at market rates is deductible to the practice; LRBA 8.85% for real property purchases; rental income taxed at 15% in accumulation / 0% in pension
• Non-concessional contributions: $120,000/yr or $360,000 bring-forward (TSB under $1.68M, under 75) - after-tax diagnostic lab income or practice sale proceeds can fund NCCs to accelerate super growth beyond the CC cap
• TBC $1.9M: Consistent contributions over a 30-year neurology career can reach the TBC early; once reached, no further NCCs; plan the TBC trajectory with an adviser - consider equalising super balances with a spouse to make use of two TBC limits ($3.8M combined)

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A neurologist's clinical skills - cognitive pattern recognition, nuanced history-taking, subtle neurological examination - are highly specific and cannot be replaced by another specialty. Protecting these skills requires careful insurance design.

• Own-occupation income protection: Neurology is a defined specialty - an own-occupation IP policy pays if you cannot perform the duties of a neurologist; a neurologist who develops essential tremor or cognitive decline affecting examination accuracy qualifies under own-occupation; they might still theoretically be able to do some administrative work (which would fail any-occupation)
• Agreed value (pre-31 March 2020): Neurologists with agreed value IP policies issued before 31 March 2020 should retain them unconditionally - the fixed benefit is guaranteed regardless of changes in income; irreplaceable after APRA's 2020 reform
• Waiting period: 30-day for sole practitioners; 90-day for hospital-employed neurologists with accumulated leave; the longer the waiting period, the lower the premium - model cash buffer against premium saving
• Benefit period to age 65: Neurology careers are long (training typically completed mid-30s, retirement ~65); a 2-year benefit period is entirely inadequate; to-age-65 benefit period is the correct choice despite higher premium
• Trauma insurance: Lump sum on serious illness diagnosis; neurologists face the somewhat ironic scenario of being at elevated risk for neurological conditions (MS, epilepsy, movement disorders) - trauma insurance paying on these conditions provides a capital sum for treatment costs and lifestyle adjustment
• Practice continuity: Neurologists in solo or small group practice should have a locum coverage arrangement and consider practice overhead insurance (covering fixed costs during disability); the locum gap can destroy a neurological practice's patient relationships if coverage is not arranged in advance

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AHPRA specialist registration (Neurology): ~$900–$1,000/yr. ANZAN membership: ~$700–$1,100/yr. MDO premiums: $3,000–$10,000/yr. All fully deductible against professional income. CPD requirement: 50 hours/yr (AHPRA standard for all medical specialists).

EEG/EMG equipment effective lives: EEG machines ~10 years (ATO TR 2022/1 medical equipment categories); video EEG epilepsy monitoring systems ~10 years; EMG/nerve conduction equipment ~10 years. Neurophysiology equipment above the $20,000 instant asset write-off threshold is depreciated under Division 40 effective life rules.

PSI vs business income distinction for diagnostic services: The ATO's PSI rules look at whether the income is derived from the individual's personal skills and labour. An EEG reporting service where the neurologist employs technicians who conduct the studies - and the neurologist provides interpretation - is more likely to be business income than a solo neurologist who both conducts and reports studies. Documentation of the technician's contribution (pay records, scope of work) is essential for defending a business income position.

Carry-forward CC opportunity: Neurology registrar years (typically ages 28–34) often generate $20,000–$25,000 in annual SG but no additional CCs. From 2018-19 to 2024-25, a neurologist who did not exceed the CC cap in those years may have accumulated $30,000–$50,000 in carry-forward entitlement - available as a catch-up lump sum contribution if TSB is under $500,000 on 30 June 2024.

LRBA rate for real property (2024–25): 8.85% per annum (ATO safe harbour minimum rate for related-party loans in SMSF limited recourse borrowing arrangements). The SMSF must charge at least this rate on any related-party LRBA; bank LRBAs are not bound by this rate but must be on commercially reasonable terms.

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