Advance Payments

Financial Framework ยท 2025-26

Global Sum

Advance payments support contractor cashflow while actual payment for prescriptions submitted is being calculated.

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Overview

How Advance Payments Work

Advance payments are made to support contractor cashflow while actual payment for the prescriptions submitted is calculated.

When pharmacies submit prescriptions to Practitioner Services, they are fully paid at dispensing month + 2 months. For example, prescriptions dispensed in January are submitted at the start of February and paid at the end of March.

The payment date set out in the Drug Tariff for the example above is the first working day of April, however Practitioner Services frequently make this payment at or before the last working day in March.

To support contractors' cash flow while reconciliation happens, an advance payment of 100% of the last 12 months' average gross total monthly payment is made (in the above example, at the end of January). Advanced payments for brand new contractors are explained in the Payments to New Contractors section.

Payment Timeline

Dispensing Month to Payment

1
January
Dispensing Month
Prescriptions are dispensed to patients throughout January.
2
Early February
Prescriptions Submitted
January prescriptions submitted to Practitioner Services for pricing.
3
End January
Advance Payment Made
100% of last 12 months' average gross monthly payment paid as advance.
4
End March
Full Payment + Recovery
Full January payment made, January advance recovered, February advance issued.

Monthly Breakdown

What Each Payment Is Made Up Of

Payment Made
Recovery of Advance From
Total Due For Month
Advance For
March
January prescriptions (paid in February)
January prescriptions
February Prescriptions
April
February prescriptions (paid in March)
February Prescriptions
March Prescriptions
May
March prescriptions (paid in April)
March Prescriptions
April Prescriptions