Today Abigail spoke in support of a bill to establish a new workers compensation scheme for police officers.
Abigail said:
On behalf of The Greens I contribute to debate on the Police Amendment (Police Officer Support Scheme) Bill 2024. We will not be opposing the bill. The bill establishes the legislative framework to follow through on the police Minister's announcement on 19 August of a new scheme to be called the Enhanced Police Support Scheme to replace the Police Blue Ribbon Insurance [PBRI] scheme, and introduces changes to total and permanent disablement coverage for officers. The history of the scheme is a pretty messy one. In 2005 it was agreed that police needed a level of financial security beyond normal workers compensation to recognise the particular acute danger that they would some sometimes find themselves in. That created a regime where a death and disability scheme was negotiated as an award condition for police.
In 2011 a new scheme was foisted upon police officers without adequate consultation and while 5,000 uniformed police officers marched outside this Parliament in protest, the scheme was ripped away as a right and as an award entitlement and replaced with an outsourced and dramatically reduced insurance product. The PBRI is, in essence, a total and permanent disability insurance product. TPD insurance products provide financial protection if someone becomes permanently disabled and is unable to continue working in their usual or qualified occupation, with benefits typically paid out as a lump sum in order to assist the recipient in navigating the changed circumstances of their living arrangements as a result of the disability.
TPD insurance is often included as default cover in superannuation funds and it was decided that the New South Wales Government would purchase the TPD insurance product for New South Wales police officers through Aware Super, with police contributing 1.8 per cent of their salary and the Government paying the rest. What that has ended up meaning across the scheme's years of operation is that the insurance premiums for the PBRI have washed through the superannuation accounts of police officers. That has resulted in artificially inflated officer salaries, leaving them with resultant excessively large tax bills each year.
The Federal Government had previously reimbursed the tax implications of the arrangement so that police officers were not left directly worse off, following a lengthy and complicated reimbursement process. However, Australian Taxation Office tax notices encouraged officers to withdraw money from their superannuation accounts to pay their tax bills and members not aware of reimbursement entitlements may have made that error. Officers were also discouraged from making voluntary contributions to their superannuation because the large PBRI premiums would consume much of their concessional cap. The reimbursement process would then falsely inflate their income, leaving them locked out of means‑tested support entitlements like Medicare levies and private health rebates, child support, childcare rebates, carer allowances and reduced prescription medication costs.
The reason for insurance premiums to go through superannuation was to avoid the imposition of fringe benefits tax, but it has still left officers with this unfortunate arrangement. The Federal Government has made the decision that it is not willing to continue the reimbursement process long term as PBRI insurance premiums continue to grow at an increasing rate. It was for these reasons that it was considered necessary to reform the ill‑suited PBRI regime. The bill proposes to replace that scheme with the Enhanced Police Support Scheme, a self-managed insurance scheme nominally managed and operated by the NSW Police Force and administered through icare and the Treasury Managed Fund. What could possibly go wrong?
The justifications given for why it is preferable to have the scheme administered in-house are sound. It should immediately reduce the cost of the scheme by removing the profit margins that existed when the scheme was administered by a private company. Importantly, the experience of injured officers receiving support payments will be streamlined from having to engage with the NSW Police Force, the workers compensation insurer and the income protection insurer. The payment of support payments will now be handled by the NSW Police Force, which is one less point of contact that officers need to navigate.
The payments will be made by the NSW Police Force, enabling a smoother payment process and easier tax time for injured officers. The Police Amendment (Police Officer Support Scheme) Bill 2024 creates the framework for the new Enhanced Police Support Scheme [EPSS], but no detail of the scheme is included in the bill. The Greens have concerns about this. We are aware that significant behind‑the‑scenes jostling and negotiations took place in the final days before the bill came to this House. But we are told that the Police Association of NSW has been able to get comfortable with where the provisions will land. I thank Pat Gourley for his advice and consultation on this issue. I hope the Government is true to its word and that we see regulations that the police association is happy with. We know, from what has been made public in places other than in the bill, that many of the conditions from the Police Blue Ribbon Insurance [PBRI] scheme will roll over into the EPSS with minimal to no change.
The most significant departure from the previous scheme is the revocation of the lump sum payment for temporary and permanent disablement. Under the PBRI scheme, officers who were deemed temporarily or permanently disabled would receive a lump sum payment, the value of which would diminish according to the age of the officer, relative to retirement age. Under the new scheme, it is proposed that there be an extension for an additional three years beyond the existing seven years of supplementary support payments for officers who have suffered a catastrophic or exceptional injury. This three‑year extension would maintain the supplementary support payment of up to 75 per cent of their salary, if the officer is assessed as meeting the criteria for a catastrophic injury as defined under part 9 of theWorkers Compensation Guidelines, or an exceptional injury.
An exceptional injury application will be assessed on the papers by a panel made up of representatives from the NSW Police Force, the Minister for Police and Counter‑terrorism and the Police Association of NSW, for recommendation for approval by the chief of police. The value of the benefit is the same for all ages—that is, there is no sliding age scale—up to age 68. In her speech in reply in the other place, the Minister spelt out what is intended by an "exceptional injury" in the context of extension payments, as follows:
(1)An exceptional injury for a person who is or was a police officer is an injury that renders the person—
(a)totally incapacitated, and
(b)unlikely ever to engage in any gainful profession, trade or occupation for which the person is reasonably qualified by reason of education, training or experience.
(2)To avoid doubt, in assessing whether a person who is or was a police officer is unlikely to ever engage in a gainful profession, trade or occupation for which the person is reasonably qualified by reason of education, training or experience the assessment—
(a)is not confined to an assessment of the person's capacity to be a police officer, and
(b)will consider the person's broader ability to engage in any profession, trade or occupation to earn an income.
It could be reasonably understood from this language and the policy choice to avoid a lump sum payment in favour of continued income support that there is a policy intention of actively working to bring injured workers back to work. While this is a noble aspiration, and a whole‑of‑government return‑to‑work framework was an important recommendation emerging from the most recent review of the workers compensation regime in New South Wales by the Standing Committee on Law and Justice, I put on the record The Greens' concerns. Our concerns stem from the high level of concentrated power given to the NSW Police Force over the operation of this regime. The catastrophic injury payment will not kick in for seven years and is likely to be a bit of a non‑event when the police‑operated government insurer is claiming to be "looking after injured police and getting them back to work". This claim is difficult to believe, as it would require a complete 180‑degree change in police culture and management. At the risk of sounding cynical, promises of a new Police Wellness Command are hollow comfort in this regard. But you have to start somewhere, and so I wish that command the very best. As The Greens spokesperson for work health and safety, I will be taking a keen interest in the evolution of that reform.
Under the PBRI scheme, an officer seeking to make a claim lodges the claim on Aware Super and the insurer, TAL. If the claim is accepted, the matter resolves, but if the claim is denied the most common options to challenge the decision are typically to seek an internal review; to lodge a complaint with Australian Financial Complaints Authority; or to file proceedings, typically in the equity division of the Supreme Court. Most police officers' matters were accepted claims and very rarely would a dispute require much more than an internal review. Under the new regime, the claims dispute resolution process will change substantially. The new scheme will put dispute resolution into the Personal Injury Commission, and the model of dispute resolution will be the same as that used in the workers compensation scheme. We can infer from this structure that it is likely that a claim will be lodged under the EPSS scheme, with the bill making provision for Insurance and Care NSW to conduct reviews of decisions. If the claim is denied on review, an application can be lodged with the Personal Injury Commission, where it will follow a path similar to the New South Wales workers compensation dispute resolution model.
The bill gives the power for a referral to an approved medical specialist, but it is unclear from the text of the bill if that will be mandatory. I would welcome any information the Government is able to provide in that regard. I understand a commission member will conduct a conciliation with the parties before making a decision. If a party is unhappy with the decision of the member, they can appeal to the Presidential Unit of the Personal Injury Commission, and any appeals from there go to the Court of Appeal. The bill creates a new division within the Personal Injury Commission for the purposes of administering the Police Officer Support Scheme. There is no requirement that the officer die or become incapacitated as a result of work. Therefore, claimants will include police officers who were hurt on duty but also police officers who were hurt off duty, and some claimants will also have workers compensation entitlements and some will not.
It will be interesting to see if there becomes a mechanism to resolve disputes that cross both divisions. For example, if both Employers Mutual Limited and the Treasury Managed Fund issue a section 78 notice for weekly payments and payments are denied under the police officer support scheme, can they be resolved at the same time? Or will someone need to effectively run the same argument twice? If so, could an injured officer get inconsistent decisions on work capacity? I hope those questions will be resolved when we get further detail in the regulations.
It is likely that the primary motivation for creating this new police-specific division in the Personal Injury Commission is to keep dispute resolution about what is effectively a weekly payment out of the courts in a low‑costs environment, where similar disputes are already determined. The creation of the new division seems primarily designed to separate costs and expedite the decision-making process for police officer claimants. The bill appears to be a nominal improvement on the existing regime, and I take reassurance in the fact that the Police Association has been able to get comfortable with its provisions.
I do, however, want to express my disappointment at the paucity of ambition in this reform. While the 2011 reforms took us two steps backwards, this bill only takes us one step forward, at best. It will probably save the Government money, and most officers will experience no difference in the way their claims are handled and will be free of the unfortunate and onerous tax implications that arose from the old regime. But the true act of political bastardry that occurred in 2011 was not to do with the financial arrangements of the specific insurance product or the way it was administered. That was simply the justification that was provided to cover up the true effect.
The real damage that was done in 2011 was the removal of death and disability payments from being an award condition, upon which police officers, through the association, could bargain to make sure it was a responsive and fit-for-purpose regime that was accountable to the people it was meant to benefit. The Industrial Relations Commission [IRC] was denied all jurisdiction at that time over the administration of death and disability payments, and prohibited from considering any cost savings arising from changes to this regime. This was and remains an assault on the rights of workers.
To that end, I flag my intention to move an amendment to the bill to remove the prohibition on the IRC from considering cost savings as a result of changes to the death and disability scheme. This is an extremely modest amendment, which merely seeks to make the bargaining landscape for police the same as applies to all other public servants, and is in keeping with the principles of mutual gains bargaining that this Parliament agreed to earlier in this term. It makes no attempt to take us back to the far preferable situation where those rights were determined through award negotiations, and the determination of disputes over the rights were arbitrated in the industrial court.
I do not think this Parliament, nor the parties, are quite ready for that reform, but I place on record The Greens' preference for such an arrangement. It is our simple and straightforward position that any workplace condition, obligation or entitlement should be determined or at least co-designed by the workers to whom it applies, and that through the democratic and deliberative process of bargaining we are able to achieve the most responsive, effective and safe workplaces possible, to the benefit of all.
With that said, I hope the Parliament can at least see the wisdom and justice in supporting our modest amendment. Without bringing the Industrial Relations Commission fully back into frame, it would nevertheless remove the unfair and unusual provision that precluded the commission from even considering real savings achieved as a result of real changes to entitlements for police officers. I look forward to hearing contributions on this suggestion in the Committee stage. We support the bill.
Abigail then moved the following amendment:
I move The Greens amendment No. 1 on sheet c2024-174A:
No. 1 Amendment of Industrial Relations Act 1996 in relation to Commission's jurisdiction in respect of death and disability payments for police officers
Page 12, Schedule 3.1, lines 3–6. Omit all words on the lines. Insert instead—
[1] Section 146D Commission has no jurisdiction in respect of death and disability payments for police officers
Omit section 146D(2).
[2] Section 146D(9), definition of "death and disability payments"
Omit "has the meaning it has in Part 9B of the Police Act 1990".
The Hon. TARA MORIARTY (Minister for Agriculture, Minister for Regional New South Wales, and Minister for Western NSW): I thank the member for the amendment. The Government is not opposing the amendment. The clause in question specifically refers to the Police Amendment (Death and Disability) Act 2011. As we are moving to a new scheme with the bill, the Government acknowledges that the clause is unlikely to contain the same meaning that it previously had when introduced into the Act. The Government does not oppose the amendment.
The Hon. SUSAN CARTER: The reasons for the amendment have already been eloquently outlined, so the Opposition is also happy to support it.
The CHAIR (The Hon. Rod Roberts): Ms Abigail Boyd has moved The Greens amendment No. 1 on sheet c2024-174A. The question is that the amendment be agreed to.
Amendment agreed to.
The CHAIR (The Hon. Rod Roberts): The question is that the bill as amended be agreed to.
Motion agreed to.
Read the transcript in Hansard here and here.
26 September 2024