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CHIEF OFFICERS STRATEGY DAY
DATE OF MEETING: 9th September 2009
TITLE: STRATEGIC RESOURCE LEVERAGE – INJURY ON DUTY AWARDS
AUTHORS: Peter Farrimond (Force Financial Manager) & Jim Spence
(Head of Personnel Services)
CHIEF OFFICER LEAD: Stephen Howarth
SUMMARY:
The Police Pensions Regulations 1987 (Part K) provides that a person who has
ceased to serve as an officer and is permanently disabled as a result of an
injury received in the execution of duty may be eligible to receive an injury
award. The amount of the award is dependent upon the officer’s length of
service and an assessment of the extent of the disablement and the
corresponding loss of earning capacity, categorised into 4 ‘Degree of
Disablement’ bands.
The Regulations require Police Authorities to consider at regular intervals
whether the degree of the pensioner's disablement has altered and to review
the level of award payable. Home Office guidelines on the operation of the
Injury Awards scheme suggest further reviews of the award when the ex-officer
reaches his/her compulsory retirement age under Police Regulations and again
when he/she reaches State Pension Age.
The Home Office issued a consultation document in August 2008 in order to
review the police injury benefits scheme which led a number of Forces to review
their operation of the scheme. Following a review of the costs associated with
the payment of Injury Awards to ex- West Mercia officers, it is proposed that the
Home Office guidance on the review of Injury Awards should be fully
implemented.
DECISIONS REQUIRED:
To support the proposals set out in this report and make recommendations to
the Police Authority, as appropriate.
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INJURY ON DUTY AWARDS
1. PURPOSE
The purpose of this report is to explain the provisions of the Police
Pension Regulations in relation to the payment and review of Injury
Awards and to demonstrate the cost savings that can be achieved by
fully implementing the Regulations and the guidance issued by the Home
Office.
2. BACKGROUND
2.1
Provisions of the Police Pension Regulations 1987
2.1.1. Part K2 of the Regulations state that
Where an injury pension is payable under these Regulations, the
Police Authority shall, at such intervals as may be suitable,
consider whether the degree of the pensioner's disablement has
altered; and if after such consideration the Police Authority find
that the degree of the pensioner's disablement has substantially
altered, the pension shall be revised accordingly.
2.1.2. This regulation was supplemented by
further guidance in HOC 46/2004
(Annex
C):
Once a former officer receiving an injury pension reaches what
would have been his compulsory retirement age under the Police
Pensions Regulations (depending on the person’s force and rank
at the point of leaving the police service) the force should consider
a review of the award payable, since it is no longer appropriate to
use the former officer’s police pay scale as the basis for his or her
pre-injury earning capacity.
In the absence of a cogent reason for a higher or lower outside
earnings level, it is suggested that the new basis for the person’s
earning capacity, had there been no injury, should be the National
Average Earnings at the time of the review.
2.1.3. and:
Once a former officer receiving an injury pension reaches the age
of 65, they will have reached their State Pension Age irrespective
of whether they are male or female. The force then has the
discretion, in the absence of a cogent reason otherwise, to advise
the SMP to place the former officer in the lowest band of Degree
of Disablement. At such a point, the former officer would normally
no longer be expected to be earning a salary in the employment
market.
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2.2 Current practice in West Mercia Police
While it has been the Force’s practice to conduct a review following the initial
granting of an award, no further reviews have been conducted. Neither has the
Force taken the opportunity to reduce the amount of the award by aligning it to
National Average Earnings when recipients reach compulsory retirement age
under the Police Pensions Regulations or placing the former officer in the
lowest band of Degree of Disablement when he/she reaches State Pension
Age.
There are currently 189 ex-police officers and 2 ex-police staff members
receiving Injury Awards, 21 of whom are over 65 and 77 of whom will reach age
65 in the next 10 years. A full breakdown is shown in Appendix A.
The cost of these awards to the Police Authority in 2008/09 was £1.4 million,
and the current budget for 2009-10 is £1.5 million. If the Force’s current practice
continues, this cost will increase year on year as the value of the awards is
linked to current Police Officer pay rates.
3.
STRATEGIC ISSUES FOR DISCUSSION
3.1 Compliance
with
Regulations and Home Office Guidelines
3.1.1 The 1987 Regulations impose a duty (
shall) on Police Authorities to
regularly review the degree of a pensioner’s disablement and revise their
pension if the disablement has substantially altered. This may result in an
increase or decrease in the amount of the payment. Whilst the
Regulations do not specify that the reviews should be conducted at any
particular interval, many Police Authorities conduct regular reviews at five
year intervals, or at shorter or longer intervals if appropriate in specific
cases. In the past West Mercia has only conducted one review after the
initial award was made so the initial level of payment has been maintained
until the ex-officer’s death.
3.1.2 The 2004 Home Office guidance suggests that Force’s should
consider a review of the award payable when the ex-officer reaches the
compulsory retirement age under the Police Pension Regulations. The
guidance also
suggests that the basis for assessing the individual’s
earning capacity should be the National Average Earnings at the time of
the review, rather than the former officer’s police pay scale. West Mercia
has not conducted these reviews so the amount paid to ex-officers over
the compulsory retirement age has continued to increase in line with police
officer pay.
3.2.3 The 2004 guidelines also give Forces the
discretion, in the absence
of a cogent reason otherwise, to place the former officer in the lowest
band of Degree of Disablement when he/she reaches State Pension Age.
West Mercia has not exercised this discretion so 8 ex-officers over the age
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of 65 are currently receiving a higher level payment (7 at level 2 and 1 at
level 4).
3.2.4 If the Home Office guidelines were to be fully implemented, careful
consideration would need to be given to whether the awards made to the
21 ex-officers and staff who have already reached the State Pension age
should also be reviewed. Any resulting decrease in the pension these
individuals receive would obviously have a more dramatic impact on their
standard of living than may be the case for younger pensioners who may
still be employed.
3.2
Implications of reviewing the Awards currently paid
3.2.1. Costs
Some additional cost and staff time will be required to complete the
reviews, the most significant of which will be the cost of Selected Medical
Practitioner.
3.2.2. Appeals from current recipients
The changes proposed will inevitably have a detrimental impact on the
income of current recipients of an award and it is likely that many will wish
to appeal to the Police Medical Appeals Board. However, advice from the
Police Federation to its members contained in JBB Circular 94/2008, is
cautious in this regard and North Yorkshire Police have, to date, a 100%
success rate in appeal hearings
3.2.3. Unwelcome publicity
West Yorkshire Police and Northumbria Police have fully implemented the
Home Office Guidance, including reviewing the Injury Awards of all those
over age 65 (see 3.2.4 above). This has caused a lot of negative publicity,
including an article in Police Review titled ‘Great Pensions Robbery’.
However, the negative impact of implementing these changes can be
reduced by ensuring full consultation with local Police Federation,
Superintendents Association and NARPO representatives.
4. FINANCIAL
IMPLICATIONS
By fully implementing the Home Office guidance, it is estimated that the
saving to the Police Authority could be £840K per year A full breakdown is
shown in Appendix B.
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5. CONCLUSION
West Mercia’s operation of the regulations relating to Injury Awards has
been over generous in the past, resulting in much higher costs to the
Police Authority than is necessary. Under the present approach these
costs will continue to rise in future years. Although the introduction of a
more rigorous process will inevitably cause some anxiety and loss of
income for some of the 191 ex-officers and staff currently receiving an
award, the benefits to the Police Authority in terms of current and future
cost savings are substantial.
6. RECOMMENDATION/S1
Subject to the approval of the Police Authority, it is recommended that:
6.1 The Injury Awards currently paid to ex-officers and staff below the age
of 65 be subject to review at least once every 5 years (or more frequently
if deemed appropriate in specific cases) in accordance with the provisions
of the Police Pension Regulations 1987.
6.2 The award paid to ex-officers who reach compulsory retirement age
under the Police Pensions Regulations be reviewed and, in the absence of
any cogent reason for a higher or lower earnings level, be adjusted to
reflect National Average Earnings.
6.3 The Force exercise its discretion under the Regulations to place all ex-
officers and staff who reach State Pension age in the lowest band of
Degree of Disablement, unless there is a cogent reason otherwise.
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APPENDIX A - CURRENT RECIPIENTS OF INJURY ON DUTY AWARDS
Injury On Duty Awards - Numbers by Age and Injury Award Level
30
25
s
ard
w 20
A
r
y
ju
n 15
r
of I
e 10
b
Num
5
0
up to 44
45 to 49
50 to 54
55 to 59
60 to 64
65 & over
Age of Recipients as at 1st April 2009
Number of Level 1 Injury Awards
Number of Level 2 Injury Awards
Number of Level 3 Injury Awards
Number of Level 4 Injury Awards
Number of Staff & Other Injury Awards
Total
Number of Injury On Duty Awards
Number
Age
of Injury
Range
Staff &
Level 1
Level 2
Level 3
Level 4
On Duty
Other
Awards
up to 44
0
12
3
1
1
17
45 to 49
4
24
9
0
0
37
50 to 54
5
14
15
3
0
37
55 to 59
7
22
5
3
1
38
60 to 64
8
20
11
0
2
41
65 & over
13
7
0
1
0
21
TOTAL
37 99 43 8 4 191
Total
Annual Cost of Injury On Duty Awards
Annual
Age
Cost of
Range
Staff &
Injury On
Level 1
Level 2
Level 3
Level 4
Other
Duty
Awards
up to 44
0
102,500
59,612
29,519
0
191,631
45 to 49
7,871
187,507
111,748
0
0
307,126
50 to 54
17,911
98,837
167,824
12,058
0
296,630
55 to 59
33,809
145,807
62,818
10,679
479
253,592
60 to 64
26,745
133,190
112,289
0
1,600
273,824
65 & over
40,817
49,085
0
14,554
0
104,456
TOTAL 127,153
716,926
514,291
66,810
2,079 1,427,259
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APPENDIX B – ESTIMATED INJURY ON DUTY COST SAVINGS
Due to the nature of the Injury On Duty Awards, it is only possible to give an
estimation of the financial impact from the Home Office Guidance on Injury On
Duty Awards. We took a sample of 10 of Injury On Duty Award recipients,
making sure that this was representative of the age and award level of
recipients. The Injury On Duty Awards were then re-calculated for a reduction to
one level below the one they were currently receiving, except those already on
Level 1. The following table shows the estimated annual savings that would
result from the changes in award levels.
Current
Current
‘Revised’ ‘Revised’
Age as at
Injury
Injury
Injury On Injury On Estimated
1st April
On Duty
On Duty
Duty
Duty
Annual
2009
Award
Award
Award
Award
Saving
Level
Value
Level
Value
63 1
£5,872
1
£5,872 £0
42 2
£10,727
1
£5,599
£5,128
48 2
£7,044
1 £807
£6,237
53 2
£6,385
1
£0
£6,385
59 2
£4,037
1
£0
£4,037
63 2
£7,253
1
£3,626
£3,627
48 3
£12,833
2
£6,973
£5,860
51 3
£13,364
2
£6,597
£6,767
60 3
£10,232
2
£6,821
£3,411
51 4
£6,207
3
£3,644
£2,563
TOTAL £83,954
£39,939
£44,015
Based on the above sample, the expected savings from just reducing the Injury
On Duty Award by one level are estimated at £840K a year.
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