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The Optional Disengagement Scheme (ODS) is an initiative designed to help support eligible police officers wishing to pursue an alternate career or life path by transitioning from the NSWPF in a dignified and supportive manner that recognises their contribution to policing in NSW. Your Association has advocated for a ODS for several years and has been successful in now achieving one. 
 
It may enable officers to transition into a new career, study, retirement or simply towards building a new life outside of the organisation. To support officers in their alternate career/life path options, the ODS includes a financial payment and career transition support.
 
We are pleased to be able to relay key information about the Optional Disengagement Scheme (ODS) as released by the NSWPF today.
 
The NSWPF has applied for and obtained a special class ruling from the Australian Taxation Office (ATO) regarding the financial payment for the ODS. The payment for tax purposes will be termed as “Early Retirement Scheme” and payments made to employees will be eligible for concessional tax treatment.

Eligibility

To be eligible for ODS, officers must satisfy the following criteria:
  • a current serving non-commissioned or commissioned officer (other than a Probationary Constable) 
  • having completed a minimum of 10 years continuous service (with previous service of officers who have been re-appointed into the NSWPF not being recognised for this purpose) 
  • under age pension age at the time of terminating employment 
Officers will not be eligible for ODS who:
  • have submitted an intent to resign or retire from 1 July 2021 
  • are subject to a process that may result in their retirement or removal 
  • are, or become, the subject of an active investigation or conduct action under Parts 8A or 9 of the Police Act 1990 
  • are in receipt of any weekly Workers Compensation benefit payments under Division 2 of Part 3 of the Workers Compensation Act 1987 (NSW)

Career Transition Support

As Career Transition support is an important part of the scheme, the NSWPF has partnered with Fortem Australia to provide a tailored ODS career transition support service to officers exiting the organisation through the ODS.
 
Officers are encouraged to seek independent financial and career transition advice to enable an informed decision before applying for ODS.

ODS Payment Guide 

Eligible officers who exit under ODS will receive a lump sum payment calculated using the following formula:
  • 4 x weeks’ base pay for each year of service capped at 30 years’ service
  • 4 x weeks’ base pay in lieu of notice
  • 8 x weeks’ base pay incentive
  • 1 x additional week’s base pay for officers aged over 45
There are payment points of 10, 15 ,20 ,25 and 30 years’ service with the payment defaulting to the lower exit point if service length falls in between those points. For example, an officer with 17 years of service will be offered payment equivalent to 15 years’ service only.
 
Payment is calculated using the base salary as specified in the Police Award for the officer’s substantive rank only. The loaded salary, specialist allowances and pay-scales (e.g., special duties allowances, detectives pay-scale etc.) will not be used for the purpose of calculating payment.
 
NOTE: The maximum total payment available to officers (irrespective of substantive rank) is capped at the equivalent amount of up to a Sergeant, Level 9 with 30 years total service. Interested officers should utilise the ODS Financial Estimator which will be available from the 20th December and will be located in Blue Portal which will include an online calculator. 
 

ATO Class Ruling

The NSWPF has applied for and obtained a special ruling from the Australian Taxation Office (ATO) regarding the financial payment for the ODS. The payment for tax purposes will be termed as an “Early Retirement Scheme” and payments made to employees will be eligible for concessional tax treatment as follows:
 
Pay Component Concessional limit Tax rate
Tax free portion $11,341 plus $5,672 for each whole year of completed service 0%
Employment Termination Payment Up to $225,000 17% (over preservation age)

32% (under preservation age)
Remaining portion N/A 47%
NB. Based on 2021-22 financial year and will change annually

For the full eligibility criteria and clearance requirements, officers must refer to the HR ODS Intranet page which will be updated in the coming weeks. The Intranet link is: 
https://intranet.police.nsw.gov.au/organisational_units/corporate_services/human_resource_services/optional_disengagement_scheme 
 
ODS will be open for applications in January 2022, however from 20th December 2021 interested officers are encouraged to go to BluePortal, to access and obtain a financial estimate. 
 
For more information, please refer to the HR ODS Intranet page in the first instance. You can also contact the PANSW on 9265 6777 or info@pansw.org.au for assistance to ensure we obtain answers to your queries.