Disputing Late Payment Interest from CTP Insurers in NSW
If a CTP insurer in NSW delays paying statutory benefits, you may be entitled to interest on the overdue amount. Under the Motor Accident Injuries Act 2017, insurers must pay benefits within 28 days of receiving a valid claim. Delays may trigger penalty interest under the Interest Act 1974 (NSW), which is calculated daily from the due date until payment is made. This article explains how to resolve disputes over late payment interest in NSW, including practical steps and formal dispute resolution options.
Legal Framework for Late Payment Interest
CTP insurers in NSW are required to pay statutory benefits within 28 days of receiving a valid claim. If they fail to do so, interest may accrue on the overdue amount under the Interest Act 1974 (NSW). The interest rate is set by law and currently applies at 10.5% per annum, calculated daily from the date the payment was due. Insurers must provide written reasons for any delay exceeding 28 days. This obligation applies to all statutory benefits, including weekly income payments and treatment and care benefits.
Dispute Resolution Pathways
If an insurer delays payment and disputes the interest claim, several formal pathways are available to resolve the matter.
- Request a written explanation from the insurer
Begin by formally requesting a written account of the delay and the basis for the interest calculation. Keep all correspondence as evidence.
- Apply for mediation through the Personal Injury Commission (PIC)
If the insurer refuses to pay the disputed interest, you may apply to the PIC for free, confidential mediation. The PIC facilitates discussions between claimants and insurers to resolve disagreements over payment terms, including interest. Mediation is not binding but often leads to a resolution.
- Apply to the NSW Civil and Administrative Tribunal (NCAT)
If mediation fails, you may apply to NCAT for a formal determination. NCAT can order the insurer to pay the disputed interest or adjust the payment schedule. Applications must be made within 6 months of the disputed payment.
- Seek legal advice
A solicitor can assess whether the interest calculation complies with the Interest Act 1974 and assist in preparing a formal complaint or NCAT application. Legal advice is recommended if the dispute involves complex financial or legal issues.
Evidence to Support Your Claim
To resolve a dispute effectively, gather and preserve the following evidence:
- Proof of the due date for payment and the actual payment date, such as correspondence, payment receipts or insurer statements.
- A copy of the insurer’s written explanation for the delay, if provided.
- The interest calculation used by the insurer, including the daily rate and period of delay.
- Records of all communications with the insurer, including emails, letters and call logs.
- Evidence of financial impact, such as lost income or additional expenses, if the delay has caused hardship.
Example Scenario
A pedestrian in Sydney was injured in a motor accident on 15 March 2025. The CTP insurer received the claim on 20 March 2025 and was required to pay weekly income benefits within 28 days. The insurer paid the first instalment on 10 April 2025, 21 days late. The claimant disputes the insurer’s refusal to pay interest, arguing that the delay exceeds the 28-day limit under the Motor Accident Injuries Act 2017. The claimant contacts the insurer, requests a written explanation, and applies to the PIC for mediation. The PIC facilitates a discussion, and the insurer agrees to pay the interest. The dispute is resolved without a formal hearing.
Time Limits and Next Steps
You have 6 months from the date of the disputed payment to apply to NCAT. If the insurer pays late but does not apply interest, you may need to prove the delay to claim statutory benefits. The 28-day payment obligation applies to all claimants, regardless of fault or injury type. Where a person’s only injuries are threshold injuries, weekly benefits and treatment and care benefits generally cease after 52 weeks under sections 3.11 and 3.28 of the Motor Accident Injuries Act 2017. This does not affect entitlement to interest on overdue payments.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.