NSW Police TPD Changes: End of Lump Sum Payouts Explained | PK Simpson

At PK Simpson, we have a long history of standing up for NSW Police officers. Since 1977, we’ve helped officers navigate the complexities of workers’ compensation and secure crucial Total and Permanent Disability (TPD) lump sum payouts for career-ending injuries, including devastating psychological conditions like PTSD and anxiety.

That’s why we’re paying close attention to the significant changes announced for police insurance, set to take effect from 1 October 2024. The existing Police Blue Ribbon Insurance (PBRI), which included TPD cover through TAL and Aware Super, is being replaced by a new, self-managed Enhanced Police Support Scheme (EPSS).

Crucially, this new EPSS scheme eliminates traditional TPD lump sum insurance cover for NSW Police officers injured after this date. This is a major shift, and it’s vital that you understand how it might affect you and your financial security if you suffer a serious injury.

What Exactly is Changing With Police Insurance?

From 1 October 2024:

The current Police Blue Ribbon Insurance (PBRI) scheme ends.
It will be replaced by the Enhanced Police Support Scheme (EPSS).
The EPSS will be “self-managed” by the NSW Police Force, not by an external insurer like TAL or managed through a super fund like Aware Super for TPD.
The biggest change: TPD lump sum insurance cover, previously a key part of PBRI, will not be included in the new EPSS for injuries sustained on or after 1 October 2024.

Who Do These Changes Affect?

These changes specifically impact current NSW Police Force members. They do not apply to other Emergency Services personnel or volunteer organisation members covered under different schemes.

What Happens to TPD Lump Sum Entitlements?

This is the most critical point:

If you suffer an injury or illness before 1 October 2024 that eventually leads you to stop working permanently, you may still be eligible to make a TPD claim under the old PBRI policy rules, even if the claim is lodged after 1 October 2024. You must have medical certification confirming that your total and permanent disability arose from that pre-October 1st condition. Urgent advice is recommended if this applies to you.
If you suffer an injury or illness on or after 1 October 2024 that prevents you from working, you will not have access to a TPD lump sum insurance payout through the new EPSS scheme.
Grey Area: If you were injured before 1 October 2024 but continue working in any capacity (even restricted duties) after that date, TAL (the old insurer) will assess any TPD claim on a case-by-case basis. However, it’s likely these claims will be declined, as you probably won’t meet the definition of “totally incapacitated” as of the policy end date (30 September 2024).

What Replaces the TPD Lump Sum Under the New EPSS?

Instead of a TPD lump sum, the EPSS aims to provide support through extended Income Protection (IP) payments:

Currently, IP under PBRI is typically capped at 7 years at 75% of your salary.
Under EPSS, if you are assessed as permanently incapacitated or catastrophically injured at the end of the standard IP period (potentially 7 years), you may be eligible for an additional 3 years of IP payments at the same rate (75% of your salary).
Crucially: To get these extra 3 years, you must pass an “exceptional payment test.” This involves convincing an independent panel (with representatives from NSW Police, the Police Association, and the Police Minister) that you are medically incapable of returning to any duty within the NSWPF.

Whether this extended IP offers comparable security to a TPD lump sum depends entirely on your individual circumstances, salary, and the potential TPD amount you would have been insured for. A lump sum provides immediate funds for medical costs, home modifications, debt reduction, and future planning, whereas extended IP provides an income stream for a longer, but still finite, period.

Are Police Workers’ Compensation Claims Affected?

No. The announcement confirms that existing NSW workers’ compensation entitlements and claims processes remain unchanged by the introduction of EPSS. If you are a NSW police officer injured at work, your rights under the standard workers’ compensation system continue.

What Should NSW Police Officers Do Now?

Understand the Date: 1 October 2024 is the critical date when TPD insurance cover under PBRI ceases.
If Injured Before 1 Oct 2024: If you have an existing injury or illness (physical or psychological) that might prevent you from ever returning to work, seek immediate legal advice from experts like PK Simpson before the deadline. We can assess your potential eligibility for a TPD claim under the existing PBRI rules. Don’t delay.
Review Your Needs: Consider if the potential extended IP under EPSS provides adequate financial protection for you and your family in the event of a career-ending injury after 1 October 2024.
Consider Private Insurance: You may need to investigate purchasing your own private TPD insurance policy if you want lump sum cover for future events. This will involve personal cost and requires careful comparison of policies.
Know Your Workers’ Comp Rights: Remember that your standard workers’ compensation rights for work-related injuries are separate and unaffected.

PK Simpson is Here to Help NSW Police

These changes significantly alter the financial safety net for officers facing career-ending injuries after 1 October 2024. While the EPSS aims to address other issues like the super concessional cap, the removal of the TPD lump sum option is a major concern.

At PK Simpson, we remain committed to supporting NSW Police officers. We understand the immense pressures and risks you face daily. If you have questions about an existing injury, a potential TPD claim under the old scheme, or about your workers’ compensation rights, don’t hesitate to reach out.

Let our experienced lawyers provide the clarity and support you need during this time of change. We have the skills and experience to ensure you understand your rights and receive every entitlement possible – Call Us Today.