Effectiveness of the New Death and Disability Scheme

New scheme returns more NSW Police officers to work after being injured

‘More NSW Police officers are returning to work after being injured and there are fewer medical discharges as a result of the new NSW Police death and disability scheme,’ said Grant Hehir, the NSW Auditor-General. ‘The new scheme is also costing less and if early trends continue, costs may fall sufficiently to meet the government’s target,’ he added.

The new police death and disability scheme, which was introduced in January 2012, increased the focus on rehabilitating and returning officers to work. Injured officers can receive income protection benefits for up to seven years under the new scheme. Large lump sum payments for partial and permanent disability are no longer available.

A statutory requirement of the scheme was a review into its effectiveness by the Auditor-General two years after its introduction.

Appropriate jobs difficult to find during rehabilitation

The growing number of injured officers returning to work has increased the operational strength of NSW Police but is placing pressure on the force to find these officers appropriate roles, especially in commands outside metropolitan areas.

‘To handle the increasing numbers of injured officers returning to work as part of their rehabilitation, the NSW Police Force should revise workforce strategies to maximise the scope and type of roles available to the injured officers,’ said the NSW Auditor-General.

Overall cost has decreased but remains above target

The overall cost of the new scheme is lower than for the previous scheme. The previous scheme’s cost rose rapidly from $69 million in 2005–06 to $260 million in 2011–12. In 2012–13 the new scheme cost $99.9 million and is estimated to cost $126 million in 2013–14.

During 2013–14, the government’s annual insurance premium for the new scheme increased to 8.3 per cent of the total remuneration paid to officers who are members of the scheme. This is above its statutory cost target of 4.6 per cent. Police officers contribute 1.8 per cent to the scheme.

‘To achieve the statutory cost target, the NSW Police Force must maintain the number of claims, payments and medical discharges close to current levels. This will provide more certainty around potential costs which in combination with greater competition amongst insurers should lower the premium,’ said the Auditor-General.

Achieving the target has been made harder by recent amendments to the scheme which expanded benefits for more severely injured officers and increased the income protection period from five to seven years. Notwithstanding this, actuarial advice provided to the Audit Office found that the target could be reached in the medium to long term if the current trends continue.

Governance arrangements need to improve

No date has been set to achieve the statutory cost target required by the new scheme and it is unclear who is responsible for achieving the target.

‘To ensure that the cost target is achieved, the NSW Police Force should set a date to achieve it and clarify who is accountable,’ said the Auditor-General.

The audit also found that delays in processing applications and payments were occurring due to multiple case managers not properly coordinating their actions and responses to a police officer’s injury.

Further information

For further information, please contact Barry Underwood, Executive Officer, 9275 7220 or 0403 073 664.