Where a person's only injuries resulting from the accident are threshold injuries, weekly benefits and treatment and care generally cease after 52 weeks (ss 3.11 and 3.28).
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).
Economic loss claims in NSW CTP motor accidents cover lost income, reduced earning capacity, and financial losses caused by injuries preventing return to daily activities. Under the Motor Accident Injuries Act 2017, claims must demonstrate how injuries directly affect a person’s ability to work, manage household tasks, or engage in routine activities. This article explains how insurers evaluate these claims, what evidence is needed, and when to seek legal advice.
What Economic Loss Claims Cover
NSW CTP insurers cover economic losses arising from injuries that limit daily activities. This includes:
- Lost income from time off work due to injury
- Reduced earning capacity if injuries prevent return to previous employment
- Extra living costs caused by inability to work or perform household duties
- Loss of future income if injuries permanently impair earning potential
SIRA’s guidelines state that claims must show a direct link between injuries and financial impact. For example, a car accident causing chronic back pain that prevents a nurse from lifting patients would support a claim for lost income and reduced earning capacity.
How Insurers Assess Daily Activity Impacts
Insurers evaluate economic loss by:
- Reviewing medical evidence showing how injuries limit daily activities
- Consulting vocational experts to assess earning capacity
- Calculating lost income using payslips, tax returns, and employment records
- Considering future income projections based on age, career path, and injury severity
SIRA’s What you can claim page explains that insurers may require detailed records of:
- Doctor’s notes detailing activity restrictions
- Employment records showing pre-injury income
- Evidence of extra living costs (e.g., home modifications)
- Statements from employers about work limitations
Key Considerations for Claimants
- Time limits: Claims must be made within 52 weeks of the accident unless the injury is a 'threshold injury' (see Motor Accident Injuries Act 2017 s 4.4). Some claims may require extension beyond 52 weeks if injuries worsen.
- Evidence requirements: Medical reports must clearly link injuries to daily activity limitations. For example, a doctor’s note stating 'unable to lift heavy objects' supports a claim for lost income as a cleaner.
- Dispute resolution: If insurers reject claims, claimants may need to request a review or seek independent medical opinions. SIRA provides templates for dispute submissions.
Practical Steps for Claimants
- Document all daily activity limitations with medical professionals
- Keep records of lost income and extra living costs
- Request a detailed assessment of earning capacity from a vocational expert
- Submit claims to the at-fault driver’s insurer within 52 weeks
- Seek legal advice if claims are rejected or if injuries worsen over time
When to Seek Legal Advice
Consult a lawyer if:
- Your injuries prevent you from returning to work
- Insurers refuse to cover lost income or future earning capacity
- You need help challenging a claim rejection
- You’re unsure how to calculate economic losses
Example Scenario
A 35-year-old teacher sustains a knee injury in a car accident. The injury prevents them from standing for prolonged periods, forcing a switch to a desk-based job with 30% lower income. The claimant can support an economic loss claim by:
- Providing pre- and post-injury pay stubs
- Including a doctor’s statement about activity restrictions
- Submitting a vocational report showing reduced earning potential
Next Steps
Economic loss claims depend on proving how injuries affect daily activities and income. While SIRA provides guidelines, claimants may need legal assistance to challenge rejections or calculate complex losses. Time limits and evidence requirements mean prompt action is crucial. For tailored advice, complete the quick, no obligation enquiry form to discuss your circumstances.