Economic loss claims under NSW's Compulsory Third Party (CTP) scheme often fail due to avoidable errors. Claimants must accurately document lost income, future earning capacity, and out-of-pocket expenses while adhering to SIRA guidelines. This article explains frequent mistakes and how to avoid them.
Key Mistakes in Economic Loss Claims
Underreporting Lost Income
Claimants often underestimate income losses by excluding part-time work, freelance income, or self-employment earnings. SIRA requires detailed records of all income sources, including payslips, tax returns, and bank statements. For example, a self-employed person who reduced hours due to injury must provide business records to prove lost profits.
Failing to Prove Future Earning Capacity
Economic loss claims may include future income losses if an injury affects long-term earning potential. SIRA's guidelines (Section 3.11) require medical evidence showing a permanent impairment or career disruption. A claimant who stopped working due to chronic pain but did not seek a vocational assessment may lose this avenue.
Not Documenting Out-of-Pocket Expenses
Expenses like medical bills, travel costs, and home modifications must be itemised with receipts. Claimants who only mention 'medical costs' without specific invoices risk having their claim rejected. SIRA's 'What You Can Claim' page lists eligible expenses, including rehabilitation and lost wages.
Missing the 52-Week Threshold
Economic loss claims for threshold injuries (soft tissue injuries meeting SIRA's criteria) are limited to 52 weeks of weekly benefits. If a claimant's only injuries are threshold injuries, they may not qualify for long-term income compensation. This rule applies even if the injury impacts earning capacity, as per the Motor Accident Injuries Act 2017 s 4.4.
Practical Steps to Avoid Mistakes
- Keep Detailed Financial Records: Track all income and expenses related to the injury. Use spreadsheets or accounting software to log changes in earnings.
- Seek Medical Evidence: Obtain reports from registered medical practitioners that link the injury to economic impacts. For example, a psychologist's report showing reduced work capacity can support future income claims.
- Consult SIRA Guidelines: Review SIRA's 'What You Can Claim' page to ensure all economic losses are covered. This includes lost income, reduced earning capacity, and out-of-pocket costs.
- Act Within Time Limits: While there is no strict deadline for economic loss claims, delays in submitting evidence may lead to disputes. SIRA recommends submitting claims within 52 weeks of the injury for threshold injuries.
When to Seek Legal Advice
Complex cases involving long-term income loss, career changes, or disputes over impairment ratings may require legal assistance. A solicitor can help navigate SIRA's requirements, challenge incorrect assessments, or negotiate fair compensation. For instance, a claimant with a 20% whole person impairment rating may need legal guidance to argue for future income losses.
Example of a Common Error
A motorcyclist injured in a crash may underestimate their economic loss by only claiming lost wages from the accident date, without accounting for reduced work capacity months later. If the injury caused chronic pain leading to a career change, the claimant must provide evidence of both lost income and altered earning potential.
Next Steps
Economic loss claims depend on accurate documentation, medical evidence, and compliance with SIRA's rules. To request contact about your circumstances, complete the quick, no obligation enquiry form.