Death benefits for dependants, what changed after 2017 reforms (NSW-wide)
A threshold injury under the Motor Accident Injuries Act 2017 (NSW) includes a soft tissue injury and a psychological or psychiatric injury that is not a recognised psychiatric illness (adjustment disorder and acute stress disorder are the usual examples; s 1.6 and Motor Accident Guidelines Part 5).
If a motor accident in New South Wales resulted in a fatality, dependants such as children, spouses or parents may be eligible for financial support under the Compulsory Third Party (CTP) scheme. The 2017 reforms to NSW CTP laws significantly changed how death benefits are assessed and funded. This article explains the key changes, how dependants are evaluated under the revised framework, and what evidence is needed to claim benefits.
Legal framework for death benefits under NSW CTP
The Motor Accident Injuries Act 2017 (MAIA) governs CTP claims in NSW. Before 2017, the Motor Accidents Compensation Act 1999 (MACA) applied, but the reforms replaced MACA with MAIA, introducing a new system for assessing injuries and benefits. Under the current scheme:
- Death benefits are available to dependants of deceased claimants. These benefits are funded by the insurer of the at-fault driver, not by the government.
- Dependants are defined as individuals who relied on the deceased for financial support. This includes children, spouses, parents, and other family members who were financially dependent.
- The assessment of dependants now follows a structured framework outlined in the
- Motor Accident Guidelines* published by the State Insurance Regulatory Authority (SIRA). This framework evaluates the financial needs of dependants based on factors such as income, living arrangements, and the deceased’s financial contribution.
Key changes to death benefits under the 2017 reforms
The 2017 reforms introduced several changes that affect how death benefits are calculated and paid:
- Shift from government funding to insurer funding, Previously, death benefits were funded by the NSW government. Now, insurers of at-fault drivers cover these claims. This change impacts how benefits are calculated and paid, as insurers must assess each claim based on the deceased’s financial contributions and the dependant’s needs.
- More structured assessment of dependants, Under the new framework, dependants must demonstrate a financial reliance on the deceased. This is determined using the Motor Accident Guidelines, which include formulas for calculating income support and living costs. For example, a child under 18 may receive a benefit based on the deceased’s income, while a spouse may receive a benefit based on the deceased’s household expenses.
- Changes to the definition of 'dependant', The reforms clarified that dependants must have relied on the deceased for at least 50% of their income. This excludes family members who were not financially dependent, such as siblings living independently.
- Introduction of a 'threshold injury' for dependants, While this primarily affects injury claims, the reforms also clarified that dependants of deceased claimants are not subject to the same 'threshold injury' rules. This means dependants are generally eligible for benefits regardless of the severity of the deceased’s injury, provided they meet the financial reliance criteria.
Practical steps and evidence for dependant claims
To claim death benefits under the NSW CTP scheme, dependants must provide evidence to support their financial reliance on the deceased. Key documents include:
- Proof of financial dependence, Such as payslips, bank statements, or evidence of the deceased’s financial support (e.g., mortgage payments, childcare costs).
- Evidence of the deceased’s income, Tax returns, payslips, or other records showing the deceased’s earnings.
- Living arrangements, Documentation showing the dependant lived with the deceased or relied on their financial support.
- Medical evidence, If the deceased’s injury contributed to their death, medical records may be required to establish the cause of death.
Time limits and disputes
Dependants have three years from the date of the accident to make a claim under the NSW CTP scheme. However, this period may be extended if the claimant can show the injury or death was not discovered within the initial three years. Claims must also be submitted within three years of the date of death for dependants.
If a claim is disputed, dependants may need to seek independent assessment by a medical or financial expert. The NSW Civil and Administrative Tribunal (NCAT) can also resolve disputes over the assessment of dependants or the calculation of benefits.
When to seek legal advice
The 2017 reforms have significantly changed how death benefits are assessed. If you are a dependant seeking financial support, it is important to:
- Consult a solicitor to understand how the reforms apply to your specific circumstances.
- Gather all relevant evidence to support your claim, including financial records and proof of reliance.
- Act within the three-year time limit to ensure your claim is processed.
Conclusion
The 2017 reforms to NSW CTP laws have changed how death benefits are assessed for dependants. While the new framework provides a structured approach to evaluating financial reliance, it also requires claimants to provide detailed evidence. If you are unsure how the reforms apply to your case, complete the quick, no obligation enquiry form to request contact about your circumstances.