How CTP Insurers Handle Late Payment Interest in NSW
If a Compulsory Third Party (CTP) insurer delays payment of statutory benefits, claimants in New South Wales may be entitled to interest under the Motor Accident Injuries Act 2017. This article explains how late payment interest works, using a practical example from Bankstown to show how claimants can protect their rights.
Legal Obligations for CTP Insurers
Under NSW law, CTP insurers must pay weekly benefits and treatment benefits within 14 days of receiving a claim form. If they fail to meet this deadline, they may owe interest calculated at the Bank Rate set by the Reserve Bank of Australia. This interest accrues from the due date until the payment is made.
The Motor Accident Injuries Act 2017 s 4.4 specifies that insurers must pay interest for late statutory benefits. For example, if a claimant is owed weekly benefits and the insurer pays 30 days late, the claimant could be entitled to additional interest based on the Bank Rate during that period.
Practical Example from Bankstown
A claimant in Bankstown suffered a soft-tissue injury in a car accident. Their insurer delayed payment of weekly benefits for 21 days. Under the Act, the claimant was entitled to interest calculated at the Bank Rate for that period. This interest was added to the total payment, ensuring the claimant received compensation for the delay.
Steps to Take if Payment is Delayed
If you believe your CTP insurer is not paying on time, take these steps:
- Keep records of all correspondence with the insurer
- Note the exact date your benefits became due
- Calculate the interest using the Bank Rate
- Request a written explanation for the delay
- Seek legal advice if the insurer refuses to pay interest
Disputing Late Payment Interest
CTP insurers may dispute claims for interest, arguing that the delay was not their fault. However, the law requires insurers to pay interest for all statutory benefits paid late. If an insurer refuses, claimants can:
- Submit a formal dispute to the insurer
- Apply to the NSW Civil and Administrative Tribunal (NCAT) for a review
- Seek assistance from a legal professional
When to Seek Legal Advice
Late payment interest can be complex, especially if the insurer disputes the claim. A solicitor can help you:
- Calculate the correct amount of interest
- Prepare a formal dispute
- Negotiate a fair settlement
- Challenge the insurer's refusal to pay
Next Steps
CTP late payment interest is a legal right that claimants must actively pursue. If you're in Bankstown or another NSW area and facing delays, it's important to act quickly. Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.