Legal Basis for Interest on Late CTP Payments in NSW
If a CTP insurer in New South Wales fails to pay statutory benefits on time, they may be required to pay penalty interest under the Motor Accident Injuries Act 2017. This interest is not discretionary, it arises automatically when a payment is late, provided the claimant has made a valid claim and the insurer has not disputed the liability or entitlement to benefits. The interest is calculated from the date the payment was due, as specified in the Act, and continues until the payment is made. This applies equally in regional areas such as Newcastle and the Hunter, where CTP insurers operate under the same statutory framework as in metropolitan NSW.
How Insurers Assess Delays in Payment Decisions
Insurers in the Newcastle and Hunter regions assess delays in payment decisions based on formal timelines set by the Motor Accident Injuries Act 2017 and the Motor Accident Injuries Regulation 2017. The insurer must make a decision on a claim within 28 days of receiving a completed claim form and supporting evidence. If they fail to do so, the claimant may be entitled to interest on any benefits that were due during the delay.
Insurers may also delay payments due to incomplete documentation, disputes over liability, or the need for medical assessments. However, a delay in processing a claim does not automatically justify withholding interest. If the claimant has provided all required information and the insurer has not responded within the statutory timeframe, the insurer remains liable for interest from the date the payment was due. Insurers in the Hunter region often use SIRA’s claim management system to track timelines and ensure compliance with statutory obligations.
Practical Steps and Evidence for Claimants
If a CTP insurer in Newcastle or the Hunter has delayed a payment, claimants should take the following steps:
- Confirm the date the payment was due by reviewing the insurer’s correspondence, claim form submission date, and any written acknowledgment of the claim.
- Gather all evidence of timely submission, including email confirmations, signed claim forms, and medical reports.
- Request a written explanation from the insurer for the delay, including any internal review or assessment that may have occurred.
- Keep a record of all communications, including dates and details of phone calls, emails, and letters.
Photographs of the accident scene, witness statements, and a copy of the police report (if applicable) may also support a claim for interest if the insurer disputes the timing of the claim submission.
Time Limits and Dispute Options
There is no separate time limit for claiming interest on late CTP payments under the Motor Accident Injuries Act 2017. However, the right to claim interest is subject to the overall limitation period for making a claim, which is three years from the date of the motor accident. If a claim is not made within this period, the right to any benefits, including interest, may be barred.
If an insurer refuses to pay interest despite a late payment, the claimant may dispute the decision through SIRA’s formal dispute resolution process. This process is available to all claimants in NSW, including those in regional areas. The dispute must be made in writing and include all supporting evidence. SIRA may mediate the matter or issue a determination, which is binding on the insurer.
When to Seek Independent Advice
Claimants who believe their CTP insurer in the Newcastle or Hunter region has failed to pay interest on a delayed statutory benefit should seek independent advice if:
- The insurer has not responded to a written request for interest within 30 days.
- The insurer disputes the date the claim was submitted or the entitlement to benefits.
- The claimant has been receiving weekly payments but has not been paid interest on any delayed payments.
Independent advice is particularly important where the claim involves a threshold injury, a dispute over liability, or a complex medical history that may affect the insurer’s assessment of the claim.
Hypothetical Example
A pedestrian in Newcastle was struck by a car in August 2024. They submitted a completed claim form to the CTP insurer on 15 September 2024, along with a medical report confirming a soft tissue injury. The insurer did not respond until 10 November 2024, and only then paid the first weekly benefit on 15 November 2024. The claimant had been entitled to benefits from 1 October 2024. Under the Act, interest is payable from 1 October 2024 to 15 November 2024, and the insurer is legally required to pay it. If the insurer refuses, the claimant may dispute the decision through SIRA.
Next Steps
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.