CTP Insurers Must Pay Interest on Delayed Statutory Benefits
If a CTP insurer fails to pay a statutory benefit within 14 days of the date the payment was due, they must pay penalty interest on the overdue amount. This obligation arises under the Motor Accident Injuries Act 2017 and the Motor Accident Injuries Regulation 2017. The interest is calculated daily from the due date and is payable at the rate prescribed by regulation, which is based on the Reserve Bank of Australia’s cash rate. This applies to all statutory benefits, including weekly income payments, treatment and care benefits, and lump sum payments for permanent impairment.
Interest Is Separate from Recovery Progress
Interest on delayed payments does not affect a claimant’s ability to return to daily activities, nor does it change the legal basis for entitlement to benefits. A claimant’s recovery and return to normal routines are determined by medical evidence and the nature of the injuries sustained. Delays in receiving payments may create financial pressure that indirectly impacts access to treatment or transport, but the insurer’s obligation to pay interest remains unchanged regardless of the claimant’s functional status or progress in recovery.
Legal Basis for Interest on Late Payments
The Motor Accident Injuries Act 2017, section 4.4, requires CTP insurers to pay interest on any amount they fail to pay on time. The interest is a statutory penalty, not a contractual obligation, and applies whether the claimant is at fault or not. It is not limited to damages claims and is enforceable under the Motor Accident Injuries Regulation 2017. The obligation arises automatically upon the insurer’s failure to pay within 14 days of the due date, and the claimant does not need to prove fault or negligence on the insurer’s part to claim interest.
Evidence Required to Claim Interest
To claim interest on a delayed CTP payment, a claimant must provide evidence that:
- The insurer was legally obligated to pay the benefit.
- The payment was not made within 14 days of the due date.
- The claimant made a formal written request for the payment.
- The amount claimed is accurate and supported by documentation, including medical reports, income statements, and treatment invoices.
Photographs of the accident scene, witness statements, and police reports may also help establish the timeline of events and confirm the insurer’s delay.
Dispute Resolution and Time Limits
There is no fixed deadline for claiming interest, but the claim must be made while the insurer remains liable. If the insurer refuses to pay interest, the claimant may apply to the NSW Civil and Administrative Tribunal (NCAT) for a determination. NCAT has jurisdiction to assess the validity of the interest claim and order payment. A claim for interest must be made within 6 years of the accident date, as required by the Limitations Act 1969.
Practical Steps for Claimants in the Newcastle and Hunter Region
If a CTP insurer delays a payment, claimants should:
- Confirm the payment was due and not received by checking correspondence and the insurer’s online portal.
- Contact the insurer in writing to request the overdue payment and notify them of the interest claim.
- Keep a record of all communications, including dates, names, and details of conversations.
- Retain copies of medical reports, income statements, and treatment invoices that support the claim.
In the Newcastle and Hunter region, claimants may contact the State Insurance Regulatory Authority (SIRA) for guidance on resolving disputes with CTP insurers. SIRA provides information on entitlements under the Motor Accident Injuries Act 2017 and can assist in clarifying the insurer’s obligations.
When to Seek Independent Advice
If a CTP insurer continues to delay payments or refuses to pay interest, it may be necessary to seek independent advice. This is particularly relevant for claimants who face ongoing challenges in returning to daily activities, including those in regional areas where access to medical services and transport may be limited. A legal adviser can help assess whether the insurer’s delay breaches statutory obligations and assist in preparing a formal dispute submission to SIRA or NCAT.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.