Securing your future

The resolution to the Concessional Cap issue and the implementation of the EPSS is worth thousands of dollars every year, and over the course of your career, may be worth hundreds of thousands of dollars in superannuation.

The large premiums for PBRI washing through your super hit members with huge tax bills every year, denied you the opportunity to save for your retirement, and locked members out of means tested support entitlements.

Last year, over 8,000 members were hit with a tax bill, sometimes tens of thousands of dollars. This made tax time every year a complex and stressful time for members. While the reimbursement process mitigated direct loss of income the Federal Government was not willing to commit to continue the reimbursement process long-term as PBRI premiums were about to grow exponentially.

Members superannuation savings were also affected – the ATO tax notices encouraged members to withdraw money from their superannuation accounts to pay these bills. And members were discouraged from making voluntary contributions to their superannuation, because the large premiums for PBRI ate away at your concessional cap.

The reimbursement process falsely inflated your income, locking members out of means tested support entitlements like medicare levies and private health rebates, child support, childcare rebates, carers’ allowances, and reduced prescription medication costs.

It was essential that the PANSW remove PBRI premiums from your superannuation.

That is what the new Enhanced Police Support Scheme (EPSS) achieves.

Depending on your circumstances, this could represents thousands of dollars of value to you every year.

With PBRI premiums now out of your super, members can decide whether it is best for them to make voluntary contributions to their superannuation, and use the full value of the concessional cap. Depending on your circumstances, this could make you hundreds of thousands of dollars better off when you reach retirement.

Thank you to all members for your commitment and unity throughout the Fix our Super campaign, and the industrial action which brought the State and Federal Governments to the negotiating table.

Insurance premiums relating to the Police Blue Ribbon Insurance scheme (except for the small cost of death insurance) have been removed from being washed through your superannuation account.

This means you will be able to make contributions to your retirement savings on par with other workers in NSW.

Members should start considering their circumstances, whether they would like to make voluntary contributions to their superannuation, and what amount. That decision should be made according to your individual circumstances and you should consider obtaining financial advice.

Your ability to save for your retirement through voluntary superannuation contributions will no longer be prevented by the concessional cap/PBRI issue. 

A small amount will still be paid through your superannuation account relating to the death coverage.

While the old scheme washed approximately 21% of your salary through your superannuation account to pay for the PBRI insurance products, under the new arrangements, this figure will fall to 0.56% of salary.

That 0.56% is necessary to maintain your on and off duty death coverage; an important protection for your family in the event of your death. There is a good reason for that to continue to be administered through your superannuation account; it is the optimal arrangement to protect your family, minimising taxation implications and to ensure the maintenance of that important coverage.

While the old scheme washed tens of thousands of dollars through your superannuation account, this reduction to 0.56% means for most officers that figure will drop to only a few hundred dollars. 

This gives back to you the ability to make contributions to your superannuation under the concessional superannuation contributions cap on par with other workers in NSW, with limited impact from  your death coverage. The concessional superannuation contributions cap has now increased from 1 July 2024 to $30,000. 

This is a permanent solution that resolves the underlying cause of the Concessional Cap problem. 

Once the scheme is fully operative: 

• You should no longer be hit with bills at tax time.
• You should no longer have to apply for reimbursements and financial assistance.
• You should no longer have a falsely inflated income caused by breaching the concessional contributions cap.
• You should no longer be prevented from accessing means tested entitlements like child care rebates.

Please note: these changes apply from 1 October 2024, so if you have not yet completed you tax return for the 2023-24 financial year, the old arrangements still apply. You should still apply for  reimbursement/financial assistance for the 2023-24 financial year. Also, PBRI still applies between July and 1 Oct 2024, so for the FY 24/25 members who may exceed the concessional contributions cap will still be able to seek reimbursement from the NSWPF. The FY24/25 will be the last time you will need to do so. 

If you have a current claim in progress with Aware super, it will not be affected. 

If an officer has an injury prior to 1 October 2024 and they have been totally unfit for work prior to 1 October 2024 they fall under the PBRI arrangements*.
*this will be a decision of the insurer.
 

The Police Blue Ribbon Insurance (PBRI) scheme is being replaced with the Enhanced Police Support Scheme (EPSS).

Your on duty disability entitlements and protections will now be provided via a benefits scheme delivered by the NSWPF directly.

In the coming days, you will receive a notice from Aware Super about the cessation of the PBRI scheme – don’t worry, the new improved scheme will replace the PBRI and there is no gap in your coverage. Every member will continue to have coverage for death and disability insurance over and above the workers compensation system - either under the old PBRI scheme or under the new EPSS.

All your benefits have been maintained and even improved. 

Click here for EPSS and PBRI comparison table

You can find a detailed explanation of the benefits in the new EPSS below.

Support payments
The entitlement to support payments of:

• 9 months cumulative at 100% of salary, and
• 7 years of up to 75% of salary, and 
• an additional 3 years  years of up to 75% of salary for eligible catastrophic exceptional extension payments (CEEP).  

This not only maintains your previous benefit, it is also improved.

9 months at 100% salary (Period 1)
The previous scheme calculated the 9 months at salary as a calendar period, regardless of whether or not you were receiving any benefits under the PBRI scheme. This was a disincentive for returning to work.

The new scheme only starts the clock on the 9 months when you are totally incapacitated, or partially incapacitated and in receipt of payments through the EPSS. 

This means an injured officer can return to work when capable of doing so, pause the 9 month clock if the workers compensation system and income earned gives them their full salary, but recommence again if they again become incapacitated and need EPSS support. 

There is no disadvantage and means the full 9 months of 100% supplementary salary support is available for when you most need it.

7 years at 75% salary (Period 2)

Injured officers can receive supplementary support payments of up to 75% of salary for up to 7 years.

The previous scheme commenced the 7 years immediately following the 9 month period meaning injured officers sometimes chewed into the benefit period when they didn’t need it.

The new scheme only starts the 7 year clock when you are incapacitated and in receipt of money through the EPSS. Once the 7 year period does commence, it will continue for 7 years unless you return to pre injury duties. 

The maximum monthly benefit cap that was applied in the old PBRI has been increased in the new EPSS, and will further increase with an annual CPI adjustment, enhancing members access to that benefit. This is of particular significance for Commissioned officer members on higher salaries. 

Under the old PBRI, members access to on duty  income protection stopped at age 65. Under the new EPSS, that is extended to 12 months post social security retirement age (68) or 7 years whichever is sooner.

An additional 3 years at 75% salary (Period 3)
The old PBRI provided for a lump sum payment to officers that were assessed as being TPD. The value of that payment diminished as officers moved through age brackets and ceased at age 65.
The new EPSS enables injured officers to make an application for a catastrophic exceptional extension payment. In circumstances where this is granted an officer may be entitled to a supplementary support benefit of up to 75% of salary, for up to an additional to three years (beyond their initial 7).

This increases the total time that members can receive supplementary support payments of up to 75% of their salary to 10 years. That is an important benefit to secure for injured police.
For many members, the longer period of support payments represents a higher dollar value to members, delivered in a way that better facilitates recovery and financial security, and does not diminish in value the way the lump sum did. 

The change from a lump sum to additional 3 years of supplementary support payments was also necessary to resolve the concessional cap issue. The insurance premium attached to a TPD lump sum payment would either continue to impact concessional cap significantly, or attract significant Fringe Benefit Tax (FBT), both options which would be unacceptable to members. 

For those who are currently certified unfit for work and are awaiting medical retirement, nothing changes and the PBRI will continue. 

First of all, the elephant in the room, an advantage of a self managed model is that costs of the scheme are used for paying benefits to injured officers, rather than to the profit margins of a private insurance company.

Importantly, the experience of injured officers receiving support payments will be improved. It is a common complaint from injured officers that it is complex and confusing to be dealing with multiple parties, having to deal with the NSWPF, the workers compensation insurer, and the income protection insurer. Now the payment of support payments will be handled by the NSWPF, so that is one less point of contact officers need to navigate, simplifying the process. The payments will be made by NSWPF enabling a smoother payment process for injured officers. 

The self managed model also creates strong incentives and opportunities for the NSWPF to help injured officers recover and get back to work, rather than just medically discharging them and leaving the rest to private insurance processes with no visibility.

The new EPSS is set up to give officers the best chance at recovering and returning back to work, and the strongest incentives for the NSWPF to support you to do that. 

No, there are NO changes to your workers compensation entitlements and claims with the exemption obtained in 2012 remaining secured

The old PBRI provided an off duty income protection benefit of up to 2 years of up to 75% of salary and the TPD scale which reduced with age.

The new EPSS extends the income protection benefit to up to 3 years of up to 75% of salary without having to meet an additional TPD test.

On and off duty death coverage remains the same as the PBRI scheme. It was crucial for the death insurance cover to remain within Aware Superannuation as it provides significant tax benefits in the event of a death payment being made to your beneficiaries. The cost of this insurance is very small in comparison to the PBRI costs which have been washing through accounts up to now which were significant. 

You can also read the NSWPF Frequently asked Questions - click here

If you have any questions, or need to understand how this applies to you, you can contact:

The PANSW:

Email: info.centre@pansw.org.au 

Call: 9265 6777

The NSW Police Force:

EPSS Hotline:   1800 014 140
Email: #EPSS-HOTLINE epss-hotline@police.nsw.gov.au

Click here to read the details about CEEP