Late Payment Interest in NSW CTP Claims: What You Need to Know
If a CTP insurer in NSW delays paying statutory benefits such as weekly income payments or treatment and care benefits, interest may apply under the Motor Accident Injuries Act 2017. This interest is not discretionary, it is a legal entitlement under the law. In Greater Sydney, claimants have successfully claimed late payment interest when insurers failed to pay within 14 days of a valid claim being made, or when payments were delayed without reasonable cause. The interest rate is set by the Act and is calculated from the date the payment was due until it is made.
Legal Basis for Late Payment Interest in NSW
Under the Motor Accident Injuries Act 2017, if a CTP insurer fails to pay a statutory benefit within 14 days of receiving a valid claim, interest must be paid on the overdue amount. The interest rate is 10% per annum, as prescribed by the Act. This applies to weekly income payments, treatment and care benefits, and other payments required under the scheme. The interest is not awarded at the insurer’s discretion, it is automatic and must be paid if the payment is late.
The Motor Accidents Compensation Act 1999 (MACA) was replaced by the Motor Accident Injuries Act 2017 on 1 December 2017. Any motor accident occurring on or after that date is governed by the current scheme, including the late payment interest provisions. For accidents before 1 December 2017, the former MACA rules apply, which had different interest provisions and were not as clearly structured.
Practical Examples from Greater Sydney
In a case in Sydney’s inner west, a pedestrian was struck by a car while crossing a footpath near the Central Station precinct. The claim was made through the CTP insurer within 10 days of the accident. The insurer acknowledged the claim but delayed processing the first weekly income payment for 28 days, citing internal review procedures. The claimant submitted a written request for payment and retained a record of the insurer’s acknowledgment. After 14 days had passed without payment, the claimant began accruing interest at 10% per annum on the overdue amount. The insurer eventually paid the first week’s benefit, but the claimant was entitled to interest for the 14-day delay.
In another example from the Northern Beaches, a cyclist was injured in a collision with a delivery van in a residential area. The claim was submitted via SIRA’s online portal. The insurer accepted liability within 12 days but delayed issuing the first treatment and care benefit for 35 days, citing a need to verify medical reports. The claimant had obtained a medical certificate confirming the need for physiotherapy and provided a copy to the insurer. The 14-day window for payment had passed, and interest began accruing from day 15. The claimant later received a settlement that included the interest amount, which was calculated on the total value of the delayed payments.
These examples reflect common patterns in Greater Sydney: delays often stem from insurer internal processing, verification delays, or administrative backlogs. The law does not require a claimant to issue a formal demand before interest begins, it starts automatically from the 15th day after a valid claim is made and payment is not received.
Evidence and Practical Steps to Support a Claim
To claim late payment interest, you must have evidence that a valid claim was made and that payment was not received within 14 days. Key records include:
- A copy of the claim form submitted to the insurer
- Confirmation of receipt from the insurer (email, letter, or online portal acknowledgment)
- A record of the date the claim was made
- The date the payment was finally made
- Copies of correspondence requesting payment
Photographs of the accident scene, medical reports, and witness contact details may also support the claim, particularly if the insurer disputes the validity of the claim. It is essential to keep all documentation in a single folder and to retain copies of all communications.
When to Seek Advice
Late payment interest is not automatically claimed by insurers, it must be asserted by the claimant. While SIRA provides information on the process, claimants may need to formally request the interest amount be included in a settlement or apply for a review if the insurer refuses to pay. Disputes over interest are uncommon but may arise if the insurer argues the claim was not validly made or that the delay was due to the claimant’s failure to provide information.
If you believe you are entitled to late payment interest, it is advisable to seek independent advice before finalising any settlement. The value of interest can be significant over time, particularly for long-term claims involving multiple delayed payments.
Next Steps
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.