Understanding Economic Loss and Treatment Funding in NSW CTP Claims
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).
In a motor accident in New South Wales, economic loss claims can cover treatment costs if they are directly linked to injuries sustained in the accident. This includes costs for medical treatment, rehabilitation, and allied health services such as physiotherapy, psychology, and occupational therapy. These expenses are funded under the Compulsory Third Party (CTP) insurance scheme, which is administered by the State Insurance Regulatory Authority (SIRA). For residents in Bankstown and elsewhere in NSW, treatment costs are not automatically paid by the insurer but must be claimed through a formal process. The CTP insurer is responsible for funding reasonable and necessary treatment that is directly related to the accident, provided it is approved under the Motor Accident Injuries Act 2017 and the Motor Accident Injuries Regulation 2017.
What Treatment Costs Are Covered Under CTP
Not all treatment costs are automatically covered. The CTP insurer must approve treatment that is both reasonable and necessary for the recovery from injuries sustained in the motor accident. Covered costs include:
- Consultations with medical practitioners, including specialists
- Physiotherapy, chiropractic, and osteopathy
- Psychological and counselling services
- Occupational therapy
- Medications prescribed for accident-related injuries
- Diagnostic imaging such as MRI or X-ray if ordered for injury assessment
Treatment must be provided by a qualified practitioner and must be part of a treatment plan approved by the insurer or a treating medical practitioner under the Motor Accident Injuries Guidelines. Costs for treatment unrelated to the accident, or for services not approved in advance, are not covered under CTP.
How SIRA and CTP Insurers Determine Funding for Treatment
SIRA does not directly fund treatment costs. Instead, it oversees the CTP scheme and ensures that insurers comply with the Motor Accident Injuries Act 2017 and the Motor Accident Injuries Regulation 2017. Funding for treatment is determined by the CTP insurer, who must assess whether the treatment is reasonable, necessary, and directly related to the accident.
For residents in Bankstown, the process is the same as for any other NSW resident. The insurer will review treatment plans and invoices submitted by the claimant or their medical provider. If the treatment is approved, the insurer will fund it directly or reimburse the claimant after submission of documentation. In some cases, the insurer may require a pre-approval process, particularly for ongoing or specialist treatment.
SIRA’s role includes setting standards for treatment through the Motor Accident Injuries Guidelines, which define what constitutes reasonable and necessary treatment. These guidelines are binding on insurers and must be followed when assessing claims for treatment funding.
Evidence and Documentation Required
To support a claim for treatment cost funding, claimants must provide clear and detailed evidence. The following documents are typically required:
- A medical certificate from a treating practitioner confirming the injury and the need for treatment
- A treatment plan outlining the type, frequency, and duration of treatment
- Itemised invoices or receipts for all treatment services
- A record of any correspondence with the insurer regarding treatment approval
- For psychological treatment, a report from a psychologist or psychiatrist detailing the diagnosis and treatment needs
In Bankstown, as elsewhere in NSW, claimants should keep all records related to treatment, including appointment notes, payment receipts, and copies of emails or letters to the insurer. These documents are essential for proving that the treatment was necessary and directly linked to the accident.
Time Limits and Procedural Requirements
There are time limits that apply to claiming treatment costs under CTP. While there is no strict deadline for submitting claims for treatment, it is important to notify the CTP insurer as soon as possible after the accident. Delays in reporting may affect the insurer’s ability to assess and approve treatment, particularly if the claimant delays seeking medical care.
If a claimant has not received approval for treatment within a reasonable time, they may request a review from the insurer. If the insurer refuses to fund treatment, the claimant may apply to the SIRA Dispute Resolution Service for a determination. This process is free and does not require legal representation.
When to Seek Independent Advice
While the CTP scheme is designed to cover reasonable treatment costs, the process of obtaining approval can be complex, particularly for ongoing or specialist care. Claimants in Bankstown who have sustained injuries that affect their ability to work or who require long-term treatment should consider seeking independent legal or claims advice. This is especially important if:
- The insurer refuses to fund treatment
- The claimant has a threshold injury and is concerned about the 52-week limit on weekly payments and treatment
- The claimant believes they are entitled to damages for economic loss, such as lost income or reduced earning capacity
An independent adviser can help assess whether the claim is eligible for damages, whether treatment should be funded under the CTP scheme, and whether a claim for economic loss may be viable.
Hypothetical Example: Treatment Funding in Bankstown
A 38-year-old resident of Bankstown was involved in a motor vehicle accident on 15 May 2026. The claimant sustained a whiplash injury and was referred to a physiotherapist for six weeks of treatment. The physiotherapy was not pre-approved by the CTP insurer but was later submitted with a medical certificate and itemised invoices. The insurer initially refused to fund the treatment, citing a lack of pre-approval. The claimant appealed to SIRA’s Dispute Resolution Service, which determined that the treatment was reasonable and necessary and that the insurer should reimburse the costs. The claimant was reimbursed for all eligible treatment expenses.
Next Steps for Claimants in Bankstown
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.