Understanding Late Payment Interest in NSW CTP Claims
If a CTP insurer in New South Wales delays paying statutory benefits, they may be required to pay penalty interest under the Motor Accident Injuries Act 2017. This interest is not discretionary, it is a legal obligation that applies when payments are made later than the time required by law. The obligation arises from a provision in the Act that mandates interest on late payments of benefits such as weekly income payments, treatment and care benefits, and lump sum compensation for non-economic loss. The rate of interest is set by the Act and is calculated from the date the payment was due until the date it is actually made.
Legal Basis for Interest on Late CTP Payments
The Motor Accident Injuries Act 2017 (MAIA) provides the legal framework for late payment interest. Under section 4.3 of the MAIA, interest is payable on any benefit that is not paid on time. The interest rate is fixed at 10% per annum, as determined by the Act, and applies to payments made after the due date. This rate is not subject to negotiation and must be paid regardless of whether the insurer is at fault or has a reasonable explanation for the delay.
The obligation to pay interest applies to all CTP insurers operating under the current NSW CTP scheme, which is governed by the MAIA. This includes insurers who manage claims through the SIRA (State Insurance Regulatory Authority) framework. The law does not distinguish between insurers based on their size, location, or claims handling practices, all must comply with the statutory interest requirement when payments are delayed.
Practical Examples of Late Payment Interest in NSW
A claimant in Sydney was entitled to weekly income payments under a CTP claim following a motor vehicle accident in June 2025. The insurer acknowledged the entitlement but failed to issue payments for 14 weeks. The claimant’s medical practitioner confirmed ongoing incapacity, and the insurer had not disputed the claim. After formal written correspondence, the insurer paid the arrears in October 2025. The claimant was entitled to interest on the unpaid benefits from the date they were due, which was 10% per annum on the total arrears.
In another case in Newcastle, a pedestrian was injured in a car park in August 2025. The CTP insurer accepted liability but delayed issuing treatment and care benefits for 18 weeks. The claimant submitted a formal claim and provided medical evidence, including a report from a physiotherapist detailing ongoing treatment needs. After the insurer failed to respond to a formal notice, the claimant received the payments in December 2025. Interest was payable on the full amount of the delayed benefits from the date they were due, as required by the MAIA.
These examples reflect common scenarios across NSW, including in regional areas such as Wollongong, the Central Coast, and the Northern Rivers. The interest is not limited to metropolitan areas, it applies equally in all parts of the state.
What You Should Do If Payments Are Delayed
If you have not received a statutory benefit by the date it was due, you should first confirm the payment was not made due to a processing error. Contact the insurer in writing, referencing the MAIA and the date the payment was due. Keep a copy of all correspondence. You may also request a written explanation for the delay, which can be used if the matter proceeds to review or dispute.
Gather and preserve the following evidence:
- A copy of the insurer’s written acceptance of your claim or liability
- The original claim form and any supporting documentation
- Medical reports confirming your injury and capacity to work
- Records of payments received, including dates and amounts
- Any correspondence from the insurer about delays
If the insurer does not respond or refuses to pay interest, you may request a review from the insurer under the SIRA guidelines. If the review does not resolve the issue, you may seek an independent review through the SIRA dispute resolution process.
Time Limits and Dispute Options
There is no statutory time limit for claiming interest under the MAIA. However, claims for benefits must be made within the timeframes set out in the Act. For example, claims for weekly income payments must be made within 12 months of the accident, unless an extension is granted. Interest continues to accrue until the payment is made, regardless of when the claim was formally lodged.
If you believe the insurer has failed to pay interest on a delayed benefit, you may request a review under the SIRA dispute resolution framework. This process is free and available to all claimants. You may also seek independent legal advice to assess whether a formal complaint or application to the Civil and Administrative Tribunal (NCAT) is appropriate.
When to Seek Advice
Late payment interest is a right under NSW law, but it is not automatically claimed. Insurers may not proactively inform claimants of their obligation to pay interest. If you have not received a payment by the date it was due, and the insurer has not provided a valid reason for the delay, you may be entitled to interest.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.