Understanding Interest on Late CTP Payments in NSW
If a CTP insurer in New South Wales fails to pay statutory benefits on time, the injured person may be entitled to penalty interest under the Motor Accident Injuries Act 2017. This interest is not automatic and only applies when a payment is delayed beyond the time required by law. The right to interest arises only after a payment has been properly demanded and remains unpaid. It is not a general entitlement for all delays, but a specific remedy for late payments of benefits such as weekly income payments, treatment and care benefits, or lump sum payments for non-economic loss.
Legal Basis for Interest on Delayed CTP Payments
Interest on late payments is governed by section 4.4 of the Motor Accident Injuries Act 2017. This provision states that if a CTP insurer fails to make a payment within 14 days of the due date, and the claimant has properly demanded the payment, the insurer must pay interest at the rate prescribed by the Act. The rate is set by the Australian Securities and Investments Commission (ASIC) and is currently 10.5% per annum, as published in the ASIC Interest Rate Determination. This rate applies to all delayed payments under the CTP scheme, including those made under a claim for weekly income support or treatment and care benefits.
Steps to Claim Interest on a Delayed CTP Payment
To claim interest, an injured road user must first ensure that the insurer has been formally notified of the need for payment. This is done by submitting a written demand for the payment, clearly stating the amount, the type of benefit, and the date it was due. The demand must be sent via a method that provides proof of delivery, such as email with read receipt, registered post, or a secure online portal if available. The claimant must keep a copy of the demand and proof of sending.
If the insurer still fails to pay within 14 days of the demand, interest begins to accrue from the 15th day after the payment was due. The claimant must then notify the insurer in writing that interest is being claimed and provide a calculation of the amount owed. The insurer is legally required to pay both the original benefit and the accrued interest. Failure to do so may result in a dispute that can be referred to the State Insurance Regulatory Authority (SIRA) for resolution.
Evidence That Supports a Claim for Interest
The following evidence is essential to support a claim for interest on a delayed CTP payment:
- A copy of the original claim form or demand for payment
- Proof of sending the demand (e.g. email receipt, post tracking number)
- The insurer’s written response, if any, acknowledging the claim or delaying payment
- A record of the due date for the payment and the date the insurer actually made the payment
- A written calculation of the interest amount, showing the rate and the number of days late
Photographs of the accident scene, medical records, and income statements may also help establish the validity of the claim and the timing of the need for payments.
Disputes and SIRA’s Role in Resolving Late Payment Claims
SIRA does not directly award interest on late CTP payments. Instead, it provides a formal dispute resolution process for claims that are not settled between the claimant and the insurer. If the insurer refuses to pay interest or disputes the claim, the injured person can lodge a dispute with SIRA through the online dispute resolution portal. SIRA will assess the evidence and determine whether the insurer was in breach of the statutory obligation to pay on time.
SIRA’s role is limited to reviewing whether the claimant followed the correct process and whether the insurer failed to meet its obligations under the Act. It does not assess the value of the claim or the reasonableness of the insurer’s position on liability or injury. The dispute process is free and does not require legal representation, but claimants may choose to seek advice from a legal practitioner or a community legal centre.
Time Limits and Procedural Requirements
There is no fixed time limit for claiming interest after a payment is made, but the claim must be made while the claim is still active. If a claim has been formally closed or abandoned, interest cannot be claimed for payments made during the claim period. The claimant must also ensure that all required documentation is submitted within a reasonable time after the payment is made, as delays may affect the insurer’s ability to verify the claim.
It does not apply to payments made under a common law damages claim, nor to payments made by a third party not involved in the CTP process.
Hypothetical Example: Claiming Interest on a Delayed Weekly Payment
A pedestrian in Sydney was injured in a motor vehicle accident on 15 February 2026. The CTP insurer approved a claim for weekly income payments on 10 March 2026, with the first payment due on 18 March 2026. The insurer failed to make the payment by 25 March 2026. On 28 March 2026, the claimant sent a written demand for the payment via email, with read receipt. The insurer made the payment on 10 April 2026. The claimant calculated interest from 29 March 2026 (14 days after the due date) to 10 April 2026, at a rate of 10.5% per annum. The claimant then notified the insurer in writing that interest was being claimed and provided the calculation. The insurer was legally required to pay the interest.
When to Seek Independent Advice
While the process for claiming interest on a late CTP payment is straightforward, it can become complex if the insurer disputes the claim or if there are issues with the timing of demands. In such cases, it is advisable to seek independent advice from a legal practitioner or a community legal centre. This is especially important if the claimant has been injured in a way that affects their ability to manage legal processes, or if the insurer has a history of delayed payments.
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