CTP Insurers Must Pay Interest on Delayed Compensation
New South Wales Compulsory Third Party (CTP) insurers are legally required to pay interest on delayed compensation payments. This applies to all statutory benefits, including weekly payments, treatment and care benefits, and lump sum damages. The exact rules depend on the accident date and claim type, but SIRA guidelines confirm insurers must account for financial loss caused by payment delays.
When Interest Applies
Under the Motor Accident Injuries Act 2017, insurers must pay interest if they fail to meet statutory deadlines. While the Act doesn't explicitly mention interest, SIRA's guidance confirms that claimants are entitled to compensation for financial loss caused by delayed payments. This includes situations where insurers take longer than 28 days to pay weekly benefits.
How to Calculate Interest
Interest is calculated using the Bank Bill Purchase Rate published by the Reserve Bank of Australia. For example, if an insurer pays 12 weeks late, the interest could total hundreds of dollars. SIRA provides tools to help claimants estimate the correct amount based on the Bank Bill Purchase Rate.
Steps to Take if Payment is Delayed
- Confirm the payment deadline: Check your claim letter or contact the insurer to verify when they must pay. Statutory benefits typically have strict time limits.
- Request written confirmation: Ask the insurer to confirm the payment date in writing. This creates a record of when they breached their obligations.
- Calculate interest owed: Use the Bank Bill Purchase Rate to estimate interest. SIRA provides tools to help with this.
- Escalate the issue: If the insurer refuses to pay interest, contact SIRA or seek legal advice. Delays in paying interest can compound financial stress, especially for claimants reliant on weekly benefits.
When to Seek Legal Advice
CTP insurers may dispute claims for interest, arguing that delays were unavoidable or that you failed to meet deadlines. A solicitor can help you:
- Review your claim letter and payment history
- Calculate the correct interest rate
- Challenge the insurer’s refusal to pay
- File a formal dispute with SIRA or the NSW Civil and Administrative Tribunal (NCAT) if needed
Next Steps
CTP insurers must pay interest on delayed compensation payments, but the exact amount depends on your claim’s circumstances. If your insurer refuses to pay, you may need to escalate the issue or seek legal advice. Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.