Lessons from an income break and how to safeguard cashflow during a downturn
24 August 2020 | Minutes to read: 3

Lessons from an income break and how to safeguard cashflow during a downturn

By Andrew Barlow

Doctors and practices nationwide are suffering a variation in revenue due to a fall in the number of visits caused by the COVID-19 pandemic, according to the Royal College of General Practitioners (RACGP), though somewhat offset by an increase in flu injections.

This is all while experiencing significant changes in the way they operate their practices and offer their services due to and throughout the pandemic.

In this article, we consider how doctors can safeguard and even boost cashflow and implement wealth strategies to ensure minimal impact from the break or reduction in income.

Data from the Australian Bureau of Statistics released in May stated that Australian unemployment reached a 22-year high in June, at 7.4 per cent. Reduced income and over a million job losses has meant that many Australians haven’t afforded their household bills let alone healthcare services. This means that even when patients are seeing their practitioners, many are making delayed payments. And while the situation is stabilising in most parts of Australia, it is dangerous to assume that cash flow will return to normal any time soon. Many people have over extended on borrowing and have found themselves in debt, which will extend the time it takes them to clear bills.

In addition, due to the COVID-19 pandemic, there’s been an increase in bulk-billed telehealth services offered in replace of full-fee face-to-face consultations. And the pause on elective surgeries has meant that many surgeons and anesthetists have seen their income fall rapidly.

This reduced income is why it’s incredibly important to budget for economic downturns and put aside money regularly to help you through these times.

The renewed importance of budgeting

Many doctors can be comfortable spending what they earn and this year’s reduction in income has forced some to live on less than what they’re used to. Revisiting budgeting is good way of highlighting expenses that are necessary and those that are a luxury and identifying a balance of spending between the two. It is inadvertently a little easier now to live on less, given traveling and leisure activities are limited. This is a major plus to finances, as without limiting spending, you could be forced to draw on loans and credit cards, putting yourself behind and potentially sinking into a debt spiral. In fact, due to enforced restrictions and limitations, our team at William Buck are finding that many financially savvy practitioners are saving more and developing resourceful habits for the future.

Income protection and medical indemnity insurance

Being well insured for loss of income is also paramount. Insurance may also protect you if you fall ill due to and with COVID-19 and many insurers even lobby the government for greater protection for healthcare workers. However, it’s important to check your policy and the terms and conditions that exist for healthcare service providers during a pandemic. Changes to policies are being announced daily so if you’re uncertain of the t’s and c’s on your policy, we suggest you speak to a William Buck financial advisor to ascertain what your protection needs are and find you the best policy.


Many Australians who have experienced reduced income are tapping into the Federal Government’s early access to superannuation scheme that allows for those impacted to access $10,000 from their super in both the 2019/20 and 2020/21 financial years. To be eligible, individuals must be:

  • Unemployed; or
  • Eligible to receive: The Job Seeker Payment, Youth Allowance for Job Seekers, the Parenting Payment, Special Benefit or Farm household Allowance; or
  • On or after 1 January 2020:
  • Were made redundant; or
  • Had their working hours reduced by 20 per cent; or
  • If the individual is a sole trader – their business was suspended or there was a reduction in turnover of 20 per cent of more.

While this is a welcome initiative for many workers who have lost their source of income and those suffering great financial pressure, unless you really need access to these funds, it’s advisable not to. This is because diminishing your superannuation can have a significant long-term impact on your final retirement balance.

For example, Super Consumers Australia modelling found that, for a 30-year-old, the $20,000 would be equivalent to $49,823 by retirement. And Choice found that for a 40-year-old, $20,000 would be equivalent to $39,904.

You can find more examples on how withdrawing super early can diminish your superannuation balance and by just how much in our article Early access to superannuation: what are the risks?

In addition, accessing your superannuation early can have consequences on your insurance as you’ll need to keep enough in your super account to cover ongoing premiums linked to the account.

The healthcare sector is experiencing a rapidly evolving situation that is having direct impact on doctors and other practitioners. If you’re experiencing a loss of income or hardship and would like to revise your wealth accumulation strategy, please contact a member of the William Buck Wealth Advisory team today.

Lessons from an income break and how to safeguard cashflow during a downturn

Andrew Barlow

Andrew is a Director in our Wealth Advisory division and is a key member of the firm’s Investment Committee providing insight and views on asset allocation and investment decisions that is applied to William Buck’ client’s funds. Andrew expertise also includes a superior knowledge in Super SA strategies and the financial life stages of a health professional.

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