Members have questions about TPD and CEEP. Here we provide detailed information about the history of the campaign, new benefits, definitions and application processes.
Concessional Cap Resolved
From 1 October 2024 members will now be able to contribute to their superannuation without fearing they will exceed their concessional cap due to excessive PBRI premiums. Other than a small amount reflecting the continued cover for death/terminal illness, insurance premiums will NO LONGER wash through your superannuation accounts consuming your $30,000 concessional cap limit.
This means once the scheme is up and running:
• you should no longer get excess concessional cap tax bills
• you will no longer be required to seek reimbursements which will inflate your salary
• you will no longer be impacted in the future on your means tested benefits
• you can now contribute to your superannuation and retirement
• Injured police still have a financial safety net
No member vote on PBRI Scheme?
Since 2005 when the first iteration of the D&D scheme commenced, there have been many changes made to it. The scheme when made in 2005, and varied in 2011, 2013 and in 2024 has never been the subject of a member vote.
In 2011 members will recall that the Govt at the time passed legislation eroding our death and disability scheme, despite over 5000 police officers in uniform marching outside Parliament House in protest showing their disgust for the changes that were being made. This didn’t stop the NSW Government at the time from passing legislation to rescind the D&D lump sum Award and replacing it with the PBRI TPD and income protection insurance. At that time, IP was only for 5 years. After 2 years of lobbying, in 2013 the PANSW secured an increase to 7 years of IP and an increase in the TPD multipliers. In 2020 the PANSW secured IP for officers aged over 60. This was never voted upon.
Workers Compensation Maintained
In 2012 the PANSW secured an exemption to workers compensation legislation changes that substantially diminished benefits for injured workers. This exemption for police remains. That means for police, unlike non-exempt workers, you still have:
- journey claims
- no cap on weekly benefits (until retirement age for police) or medical expenses (for life)
- s.66/67 commences from 1% (physical) 15% (psychological) and you continue to be able to receive compensation for pain and suffering
This does not change for police officers under the EPSS. The crucial benefits outlined above are only applicable to police officers as exempt workers. All other workers in NSW have their benefits (medical and weekly income support) cease based on a work capacity test related to a % of impairment, and permanent impairment claims require a minimum of 10% impairment to be claimable.
All current workers compensation entitlements for police officers remain unchanged. You can still claim lump sum compensation for permanent impairment (s.66), pain and suffering (s. 67), and you can still pursue lump sum work injury damages claims.
PANSW Position – Delegates
There has never been a vote on this scheme since its commencement in 2005. The NSWPF and NSW Govt created the scheme and made changes to it over the years. At times, this has involved consultation with the PANSW and at other times substantial changes have been made without consultation, such as in 2011 when we marched. The PANSW are directed by the PANSW Conference Delegates on what must be maintained and supported in a scheme.
What has plagued the PBRI scheme since 2011 is the fact that the rising insurance premium costs (cost of providing insurance to police) washes through each members superannuation account causing excess concessional cap tax notices for thousands of members (in excess of 8,000 members are now affected). This has had an adverse impact on our members reportable salary for taxation and Centrelink benefits. This was not of our doing. This scheme was not created by the PANSW nor were we consulted on its structure, yet the adverse impact on members with concessional cap bills has been significant and unacceptable.
Conference Delegates and all members have strongly advocated to resolve this tax issue permanently whilst maintaining the safety net for those officers who are injured. That is what we have secured in the EPSS.
Premiers Commitment
Following the State Election in 2023, the PANSW became aware that the previous Liberal Govt had not budgeted for the PBRI to continue. The PANSW actively sought a pre-election commitment from the Labor Government to continue a safety net for injured police officers at no extra cost to members for the term of their Government.
The Premier committed to maintaining the scheme and working with the PANSW to resolve the concessional cap issue that had clearly arisen.
Since that commitment the PANSW became aware that the cost of the premiums to maintain PBRI in its current form was going to rise exponentially. There was already a very significant impact on members created by breaching the concessional superannuation contributions cap at the existing premium cost.
With exponential increases in premium costs for PBRI insurance, those concessional cap problems (and the consequent impact on members) were also slated to become exponentially worse – potentially doubling the concessional cap tax bills to members.
Preventing those increased premiums from continuing to wash through your superannuation accounts was a priority. The dramatic increase in concessional cap breaches would be completely unacceptable to members. Resolving concessional cap and removing the benefits scheme from superannuation had to occur and is a significant win for members (all members, not just those who are unlucky enough to be injured).
Taxation
Excess concessional cap tax bills would have likely at least doubled if the product in its current form remained within Superannuation. The Federal Government commitment for reimbursement would have ceased if the scheme remained in its current form without removing it from Superannuation.
In simple terms, you as members would have received much larger tax bills and they would not have been reimbursed and would have been at your personal expense.
• The 2024 changes to PBRI effectively removes the PBRI from Superannuation (except for a small amount for death and terminal illness cover that remains in super), removing the concessional cap issue.
• If the TPD structure remained within Superannuation, members would have continued to see growing excess concessional cap bills far exceeding what members have seen thus far. Removing it from superannuation had to occur to resolve this issue.
• Moving the TPD insurance arrangement outside of Superannuation and maintaining the lump sum TPD payment, would have seen the larger premiums applied but also would have attracted Fringe Benefits Tax (FBT). The cost of FBT would then be attributed to every member on their payment summary (group cert). This again would have affected reportable income and access to means tested Govt benefits for members.
• This was not a solution, and members would have seen concessional cap simply replaced with FBT.
The scheme needed restructure to ensure members were not hit with unacceptable taxes, but continued to have access to a comparable benefit scheme should they experience a serious injury resulting in incapacity.
EPSS
EPSS payments are supplementary to workers compensation. The Workers Compensation insurer will continue to make decisions on workers compensation claims, and the NSWPF will make an additional supplementary payment mirroring the workers compensation decision, not merely the decision of NSWPF management. These payments are 7 years up to 75% with the additional 3 years up to 75% upon application for catastrophic or exceptional injuries.
Catastrophic Exceptional Extension Payment (CEEP)
By providing an extension to the 7 year supplementary payment up to 75% benefit to 10 years for Catastrophic OR exceptional injuries, the scheme does not attract FBT. Being a self managed scheme removed from Superannuation, this removes the concessional cap tax issue.
The new EPSS increases the benefit for our more senior and older members (44 and above) who are seriously injured as it removes the current unfair declining benefit with age scale that is used in TPD insurance.
- Eligibility to apply
- After 6.5 years from the commencement of EPSS 7 years benefit period officers can make written application for CEEP
- Suffering an exceptional injury (based on medical advice – still on WC claim)
- Not currently in any employment or employed for the past three years prior to application
- Extension of EPSS benefit at 75% for up to 3 years bringing the benefit period to 10 years up to age 68 under WC or completion of the relevant period (7, 10 years) whichever is sooner
- There will be a presumptive approval for catastrophic injuries as defined by Part 9 of the Workers Compensation Guidelines (in which case the top up period is automatically approved for the 3 year extension period)
OR
- Exceptional injury applications to be assessed on the papers by the Panel for recommendation for approval by the CoP
- Panel is made up of representatives from the NSWPF, Minister of Police and Counter Terrorism and PANSW
- For Exceptional injuries, the independent panel will review the application taking into account various types of evidence to inform their recommendations, which could include income or pay slips, medical or health assessments, vocational assessments, Whole Person Impairment Assessments, or any other material deemed necessary to determine the officer’s capacity to work again. This assessment process is consistent with the current one.
Appeal rights will be retained for officers to an external independent tribunal in relation to EPSS relating to payments and decisions.