CTP Insurers' Obligations on Late Payment Interest
A threshold injury under the Motor Accident Injuries Act 2017 (NSW) includes a soft tissue injury and a psychological or psychiatric injury that is not a recognised psychiatric illness (adjustment disorder and acute stress disorder are the usual examples; s 1.6 and Motor Accident Guidelines Part 5).
Under the Motor Accident Injuries Act 2017 (MAIA), CTP insurers in NSW must pay interest on delayed statutory benefits. Section 4.4 of the MAIA specifies that insurers must account for time-related costs when calculating compensation. While the exact rate of interest is determined by the Motor Accident Injuries Regulation 2017, the key legal principle is that delayed payments of weekly benefits or treatment funding may trigger interest charges. This ensures claimants are not financially disadvantaged by insurers' processing delays.
How Late Payment Interest Affects Treatment Funding
Statutory benefits under CTP cover treatment costs, including medical bills, therapy, and specialist care. If an insurer pays these benefits late, the claimant may face financial strain while awaiting treatment. The interest owed on delayed payments is intended to compensate for this disruption. For example, if a claimant requires ongoing physiotherapy but the insurer delays weekly payments for six weeks, the interest could cover the gap in funding. However, interest does not cover additional treatment costs beyond the statutory benefits.
Practical Steps and Evidence for Funding Disputes
To address disputes over delayed treatment funding, claimants should:
- Document all communication with the insurer, including dates of correspondence.
- Keep medical records showing the timing of treatment and associated costs.
- Request written confirmation of the insurer’s payment schedule.
Insurers must provide a reason for delays under the MAIA. If a claimant believes the insurer is withholding funds without justification, they may need to escalate the matter through the NSW Civil and Administrative Tribunal (NCAT).
Time Limits and Dispute Resolution
CTP claims must be submitted within five years of the accident under the MAIA. However, interest on delayed payments accrues from the date of the delay, not the accident date. If an insurer refuses to pay interest or treatment costs after this period, claimants should:
- Review the insurer’s payment schedule to confirm the delay.
- Submit a formal dispute request via the insurer’s claims portal.
- Seek legal advice if the insurer ignores the claim.
When to Seek Independent Legal Advice
Claimants should consult a solicitor if:
- The insurer denies liability for interest or treatment costs.
- The claimant’s injuries exceed the threshold injury definition under the MAIA.
- The claimant is unsure whether the insurer’s delay constitutes a breach of the MAIA.
Legal professionals can help claimants understand their rights under the MAIA and ensure insurers comply with their obligations.
Next Steps for Claimants
If your CTP insurer has delayed payments of treatment costs or refused to pay interest, you are not alone. While the MAIA sets clear rules, each case depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.