Executive summary

	The focus of our audit
	There are currently over 15,000 police officers in NSW. Today, injured police are covered by two different schemes each with their own requirements. Around 3,000 officers employed before 1 April 1988 are covered by the Police Superannuation Scheme (PSS). This scheme provides a pension and hurt on duty benefits to injured officers who are unable to return to policing. The PSS closed in 1988.
	Officers employed after 1 April 1988 are covered for work related injury and illness under NSW workers compensation legislation, and have additional insurance benefits available under the 2005 Death and Disability scheme.
	The treatment of injured police officers has often attracted comment. Over ten years ago the Police Royal Commission made mention of the hurt on duty provisions under the PSS. It reported that there was potential abuse of the scheme, with some officers seeing it as an early way out of the service with maximum financial benefit. In some cases, as soon as the link with the NSW Police Force was broken, the officer recovered and returned to a different job.
	The NSW Government in 2005 set specific occupational health and safety targets for public sector agencies in order to improve workplace safety and rein in the cost of insurance premiums.
	For the NSW Police Force this meant significant changes in practice and results. With over 2,600 workers compensation claims in 2006-07, a conservative estimate of the direct cost of injuries to the Force in that year was over $110 million in premiums and payouts.
	The Industry Commission and the National Occupational Health and Safety Commission have estimated that only 25 per cent of the total cost of work related injuries were direct costs. The remaining 75 per cent were indirect costs such as loss of productivity, and loss of income and quality of life. In the NSW Police Force this is estimated at around $330 million.
	In 2006, the Force established the safety command staffed with specialists to improve the case management of injured staff. Safety command has set up systems to ensure early notification when an officer is injured, liaising with the officer and the treating doctor on rehabilitation options, preparing return to work plans, and managing workers compensation claims.
	In this audit we wanted to find out how well the NSW Police Force manages police officers who are injured at work to minimise the impact on policing, especially those employed after 1988.
	Specifically, we examined whether the NSW Police Force has: § an effective framework for managing injured officers § successfully reduced the impact of injuries.
	Audit opinion
	Overall, the NSW Police Force’s approach to managing injured officers since 2006 is appropriate, focussing on notification and early intervention and the development of successful return to work plans.
	Early intervention and return to work are the key factors in successfully managing injured officers and reducing the cost of workplace injuries. The Force has not done this well in the past. Through the establishment of the safety command, the Force has built a framework for managing injured officers that should optimise early return to work.
	The results are already promising. The Force has had some success in reducing the impact of injuries. More officers now return to work than in the past, benefiting both the officer’s well being and reducing the Force’s financial exposure. Workers compensation insurance premiums for 2008-09 have also reduced by $7 million to below $58 million.
	Yet, the Force still faces a number of serious problems. In 2006-07, 24 police officers retired due to age and 263 resigned. But 445 officers were retired on medical grounds, the majority on medical discharge. According to NSW Police, approximately 80 per cent of these were officers employed before 1988.
	The rate of medical discharge increased by over 40 per cent between 2003 and 2007. This rate appears excessive. In Victoria, around 15 per cent of officers retire on medical grounds compared to 57 per cent in NSW.
	In fact, following the introduction of the new Death and Disability insurance scheme in 2005, the number of officers employed after 1988 leaving the Force on medical grounds increased by 300 per cent. And like the old scheme, these officers if capable, can engage in any employment elsewhere after they have received their lump sum payment.
	Some officers might perceive this new scheme in the same way that the old scheme was seen, that is, as a preferred means of leaving the NSW Police Force.
	When introduced by the Government in 2005, the scheme was intended to limit the Government’s financial exposure to 3.6 per cent of the total salary of police officers covered by the scheme. If the scheme costs too much it had to be reviewed.
	Claims history and lump sum payments under the scheme increased its cost to over five per cent after its first year, costing around $33 million. As yet, the Force has not completed a review of the scheme.
	The increase in costs is due mainly to the partial and permanent disability cover where lump sum payments are a factor of the officer’s age and can be more than eight times the officer’s salary. And the future looks bleak. An actuarial assessment of future liabilities under this part of the scheme predicts an increase from around $29 million at June 2006 to over $115 million at June 2008.
	This trend is unacceptable and must not be allowed to continue. The review of the scheme should be completed as a matter of urgency.
	Key audit findings
Chapter 1 Managing injured police	Policing can be a dangerous job and priority is given to minimising the risk of injury or death. Where officers are injured on duty they need to be cared for and returned to work as soon as possible.
	In 2006-07, the NSW Police Force had: § over 15,000 police officers § around 3,000 police officers employed before 1988 § nearly 2,800 staff that reported workplace injuries resulting in time off work § over 63 days lost per injured employee § 2,631 workers compensation claims lodged § 445 police officers retired on medical grounds.
	In May 2005, the Government announced a $105 million reform package to overhaul the way in which the NSW Police Force (the Force) supports police officers who are killed or injured in the performance of their duties. The aim was to address inequities and better manage return to work.
	Police officers employed before April 1988 (pre’88 officers) are covered by the compulsory Police Superannuation Scheme (PSS) which entitles them to benefits, including medical and rehabilitation expenses, and a pension if they retire on medical grounds.
	In 1988, the then Government reviewed a number of superannuation schemes and closed the PSS. Police officers who joined the Force after 1 April 1988 (post’88 officers) joined the State Authority Superannuation Scheme or First State Super, which cover other public sector workers in NSW. These officers are also covered by workers compensation.
	The result was a situation whereby two officers rostered on the same shift, responding to the same incident, and receiving the same injury could receive different compensation simply because of the date that they joined the Force.
	Recognising this, the Government introduced a compulsory Death and Disability scheme to cover post’88 officers as part of the 2005 reform package.
	The Death and Disability scheme was designed to provide post’88 officers with additional insurance protection commensurate with the risk they face in the line of duty.
	The Death and Disability scheme provides lump sum payments on death or total disability. It also provides lump sum benefits where the officer is partially and permanently disabled.
	Pre’88 officers represent around 20 per cent of the Force and are not covered by workers compensation. When injured, the Force continues to pay the officer’s salary while PSS pays all medical and rehabilitation expenses.
Chapter 2 Is the framework for managing injured police effective?	Through the establishment of the safety command in June 2006, the Force has built a framework for managing injured officers that should prove to be effective. Once a police officer has been injured, early intervention and return to work are key factors in the officer’s successful rehabilitation. The NSW Police Force has not done either of these well in the past. Through the safety command, the Force has introduced systems and practices to ensure it knows when an officer has been injured and can respond appropriately. These include an online system for reporting injuries, timeframes for assessing and responding to an officer’s rehabilitation needs, and early and continuous welfare checks by fellow staff. Rehabilitation outcomes are better where the return to work is as early as possible and often before the officer is able to undertake the full responsibilities of the job. The safety command plays a key role in developing return to work plans in consultation with the injured officer, the local area command and the treating doctor. Overall, we found that safety command had prepared appropriate plans for injured staff. For an injured police officer, early return to work also relies on the local area command making a suitable job available and if needed, adjusting the officer’s working conditions to comply with restrictions in medical certificates. This is not always easy, but we found that in the commands we visited, suitable jobs were available to most injured officers. Part of early intervention is also the investigation of an incident to reduce the risk of recurrence. At all the commands we visited there was some review of the incident. However, the extent of the investigation differed and was not related to either the severity of the injury or its likelihood to reoccur.
	We found problems with obtaining data on injured officers as distinct from civilians working in the Force. There have also been problems in isolating data on return to work and medical discharges relating to workplace injuries as distinct from off-duty injuries. And in some cases, data on the impact of injuries before 2005 is not available.
	We recommend that the NSW Police Force: 1. establish systems to collect sufficient data to judge the efficiency and effectiveness of injury management practices in respect to police officers by June 2010 (p 16) 2. develop injury management guidelines to help commands consistently implement policies by March 2009 (p 17) 3. introduce quality assurance practices as part of its routine audits of commands to test compliance with injury management policies and procedures by March 2009 (p 17)
	4. develop standards for investigating incidents based on the severity and type of incident by June 2009 (p 19) 5. as part of the quality assurance program for injury management, test compliance of injury management plans and return to work plans with policy by March 2009 (p 21) 6. monitor performance against its one week standard for the placement of injured officers in suitable positions by March 2009(p 21).
Chapter 3 Has the Force reduced the impact of injuries?	The Force’s efforts to reduce the impact of injuries have achieved mixed results. Although the average time lost per employee has reduced, the total time lost for workplace injuries and time lost for each person injured have increased, especially for post’88 officers. This group is now taking longer to return to work. The type of injury may be a factor. Although the total number of claims has reduced, claims for psychological injuries are increasing and were rated as the third most common cause of injury in 2007-08. On the positive side, more officers are returning to work than in the past. And the Force has had some recent success in reducing the cost of workers compensation insurance premiums, in part as a result of its improved injury management practices. In fact, after peaking at $65 million in 2007-08, the Force has been able to reduce the premiums to below $58 million in 2008-09, a saving to the Force of over $7 million. Despite these improvements, the Force will struggle to further reduce the total cost of injury. This is mainly due to the cost of the 2005 Death and Disability scheme which provides insurance cover for injured post’88 officers. Under this scheme, injured officers who are partially and permanently disabled and cannot be found a suitable police position can receive a lump sum payment on medical discharge. These payments are calculated on a sliding scale depending on the age and salary of the officer. In addition, the Force tops up the weekly workers compensation benefits of injured post’88 officers so that their rates of pay do not reduce after 26 weeks of injury, as it does for civilians in the Force. These financial benefits are likely to discourage return to work and may make medical retirement the preferred option for some who wish to leave the Force. In fact, following the introduction of the new scheme in 2005, the rate of medical discharge for post’88 officers has tripled. This increase has also meant that the cost of premiums and payments under the Death and Disability scheme was about $33 million; over five per cent of salary cost in its first year (2005-06). However, the scheme was designed to limit the Government’s exposure to a maximum of 3.6 per cent of salaries of post’88 officers, or around $22 million. Any increase beyond 3.6 per cent was supposed to trigger an immediate review of the scheme. As yet, the Force has not completed its review.
	A review of NSW Police, NSW Fire Brigades and Ambulance Service death and disability schemes is currently being undertaken by the Department of Premier and Cabinet.
	We recommend that the NSW Police Force: 7. investigate and develop strategies to address psychological injuries in order to encourage early return to work by June 2009 (p 28) 8. finalise the guidance material to assist medical practitioners make decisions regarding work restrictions on injured officers by June 2009 (p 30) 9. review the approach to determining the number of permanent restricted duty positions in a command as a proportion of actual strength on a case by case basis (p 30) 10. review the conditions in the Death and Disability scheme to improve the rate of redeployment of post’88 officers to suitable positions in the Force or elsewhere in the public sector by June 2009 (p 31) 11. review  the impact of the top-up pay to post’88 officers under the Police Award 2005 by June 2009 (p 31) 12. develop in consultation with the Police Superannuation Scheme administrator, protocols including time standards for processing medical discharge applications by March 2009 (p 35) 13. monitor the determination of hurt on duty claims by commands against its three month standard by March 2009 (p 35) 14. complete its review of the benefits and officers’ contributions under the Death and Disability scheme with a view to either reducing benefits, increasing officers’ contributions or ceasing the scheme as a matter of urgency (p 38).

Response from the NSW Police Force

The NSW Police Force welcomes the findings of the Audit Office, which confirm that since the introduction of the Safety Command in 2006 this organisation has made significant improvements in injury management. Since that time we have introduced a range of strategies to assist in the prevention of injuries and developed robust early intervention and return to work strategies.

Our current approach to managing injuries has resulted in a reduction of our workers compensation premium, a reduction in the number of workers compensation claims as well as time lost per employee.

The NSW Police Force is committed to ensuring the continuing safety, health and wellbeing of our staff and accepts the recommendations of the Audit Office for further improvement. We will establish systems to address these recommendations, including improved data analysis, the introduction of guidelines to assist staff in following policy and other requirements, the strengthening of our compliance systems and the revision of our incident investigation process.

A key priority will be the completion of the review of the Death & Disability Scheme. In the meantime we will continue to work closely with the Police Association of NSW to ensure that officers are appropriately managed to maximise returns to work. A Fitness to Continue Unit has also been created which, in close conjunction with Injury Management Advisors, will assist in retaining skilled and experienced police officers. We are already seeing some promising results from this program.

I am advised that the Safety Command has already been in contact with your Office in regards to data and analysis relating to time lost per injury and other matters.

(signed)

A P Scipione APM

Commissioner of Police

Dated: 1 December 2008.