The new method will put an end to the recent huge disparities which have left GPs facing four-figure clawbacks.
The Technical Steering Committee, which supports GP contract negotiators, has simplified the way it calculates the interim factor on which seniority pay is based (ISF). 'The risk of overor under-payment is now low,' said GPC deputy chairman Dr Richard Vautrey.
Seniority payments are based on estimates until final figures are published, usually four or five years in arrears. This leaves GPs overor underpaid and facing clawbacks or top-ups.
The existing calculation 'dramatically overstates' the 2008/9 ISF at £105,524 compared with the 'more realistic' new estimate of £93,265, said Stuart Williamson, a partner at accountancy firm Williamson West.
Big disparities between estimates and actual payments in 2004/5 and 2005/6 mean some GPs face clawbacks of up to £4,000 per partner (GP, 20 November 2009).
The new method would have saved many practices from clawbacks by raising the 2005/6 estimate to £91,123 from £80,940.
Falling or static income has recently reversed this position, leaving GPs underpaid as the estimate far exceeds the expected actual seniority figure.
'This leaves GPs with the temporary loss of the use of the money,' said Mr Williamson.
The new method will produce a 2009/10 estimate for England of £94,743. In Wales the expected estimate will be £84,667.
But Mr Williamson said that the system fails to deal with an inherent unfairness in the way that seniority pay is worked out.
The income used to work out the seniority factor includes dispensing income. 'It is unfair on GPs who do not have this to boost their profit,' he said.