An early retirement scheme designed for disengaged police has not cut medical exits and might have contributed to a staffing hole within the force.
The NSW Auditor-General released a report into the mental health and wellbeing of the state's police, finding increasing psychological injury claims, compensation payouts and medical exits.
Compensation claims totalled about $1.75 billion between 2019 and 2024, increasing at nearly 50 per cent year-on-year throughout that period.
A 'golden handshake' scheme - the Optional Disengagement Scheme - which was established in 2022 prompted 679 police to exit the force, with a lumpsum of up to 133 weeks' pay.
It was open to officers who have worked for more than 10 years and the average payout was $203,600.
But the auditor's report found no evidence the $138 million scheme had resulted in the departures of police who were not fit or were unsuited to their roles.
Instead of reducing medical separations for psychological reasons after its implementation, they continued to rise.
"Ultimately, it resulted in a financial burden on the NSW Police Force budget, in conjunction with a reduction in police numbers at a time when there were emerging workforce shortages," the report read.
"The Scheme contributed in part to the current scale of the workforce shortage problem ... (it) is an example of an initiative that was not matched to workforce risks."
A lack of understanding about the causes of psychological stress among police was stopping preventative measures being brought in, the report found.
Among four recommendations, the report says the force should investigate the causes of overload and burnout and adjust their policies and practices accordingly.
The report follows years of recruitment and retention issues throughout the force, culminating in pay structures being overhauled in November at a cost of $700 million over four years.
The report found 20 per cent of the workforce was unavailable for duty in June 2024 owing to mass vacancies and long-term sick leave.
Psychological claims rose from 790 in 2019/20 to 1208 in 2023/24.
Of police leaving the force, half do so for medical reasons and 93 per cent of those are for psychological reasons.
The leading causes of psychological injury among the state's force were mental stress factors, exposure to violence, work pressures and work-related harassment, along with exposure to traumatic events.
A police spokeswoman said the force had made significant inroads in the past three years to improve awareness, training, education and support.
The auditor-general did note a reduction in psychological injury notifications since October 2024.
"Policing is a challenging and rewarding job and, at times, officers are exposed to traumatic incidents," the NSW Police spokeswoman said.
"The psychological well-being of our people is vitally important, and we will continue to improve the support programs at all levels that enable our officers to do the job that they love."
A number of the suggested improvements made by the report were already underway, she said.
