When CTP Insurers Must Pay Interest on Delayed Payments
If a CTP insurer in New South Wales fails to pay a statutory benefit within 28 days of the due date, they must pay interest on the overdue amount under the Motor Accident Injuries Act 2017 (MAIA). This obligation applies to weekly income payments, treatment and care benefits, and lump sum damages. The interest is not a discretionary payment but a legal requirement that arises automatically when a payment is late. It applies regardless of whether the insurer accepts or disputes liability, as long as a claim has been made and the insurer has a duty to pay.
Legal Basis for Interest Under the MAIA
Section 4.10 of the MAIA requires an insurer to pay interest on any amount they are required to pay under the CTP scheme if the payment is not made within 28 days of the due date. The rate of interest is set by the Australian Securities and Investments Commission (ASIC) and is currently 12.00% per annum, as published in the ASIC Interest Rate Determination 2024. This rate applies uniformly across NSW, including Greater Sydney, and cannot be altered by the insurer.
Interest begins to accrue from the day after the payment was due. For example, if a weekly income payment was due on 15 October 2026 and not paid until 20 November 2026, interest would start accruing on 16 October 2026. The 28-day deadline is strict and cannot be extended by internal review, dispute resolution, or pending medical reports. The insurer must pay interest unless a court order or statutory exemption applies.
How Insurers Determine and Pay Interest
Insurers are required to calculate interest using the ASIC rate and apply it to the full amount of the delayed payment. They must provide written notice to the claimant within 14 days of making the payment, including a breakdown of the interest calculation. This notice must state the due date, the actual payment date, the interest rate used, and the total interest amount.
An insurer may dispute the claimant’s entitlement to interest if they believe the claim was not properly made, the benefit was not due, or required documentation was not provided. However, such disputes must be resolved under the Motor Accident Injuries Regulation 2017. An insurer cannot withhold interest simply because they are reviewing a claim. The 28-day rule remains in force unless a formal exemption or court order exists.
Evidence to Support a Claim for Interest
To challenge a late payment or claim interest, a claimant should preserve the following evidence:
- A copy of the original claim form and any correspondence confirming submission to the insurer.
- The date the benefit was due, as stated in the insurer’s written response or calculated under the MAIA.
- Proof of the actual payment date, such as a bank statement, payment receipt, or insurer’s confirmation.
- A record of all communication with the insurer about the delay, including emails, letters, or call logs.
If the insurer has not provided a written explanation for the delay, this may support a claim that the delay was unjustified. For example, if a claim was submitted on 20 September 2026 and accepted on 10 October 2026, but the first weekly payment was not made until 15 November 2026, interest would be due for the 46 days between the due date (28 days after acceptance) and the actual payment.
Review and Enforcement of Interest Obligations
If an insurer fails to pay interest on a delayed statutory benefit, the claimant may seek a review through the State Insurance Regulatory Authority (SIRA). SIRA has the authority to investigate and enforce compliance. A claimant may also pursue a claim for the interest amount through the NSW Civil and Administrative Tribunal (NCAT) or the NSW Supreme Court, depending on the value and nature of the claim.
SIRA has previously issued formal notices to insurers for non-payment of interest and has imposed financial penalties in some cases. These actions confirm that interest is a statutory right, not a discretionary benefit. Insurers are also required to report interest payments to SIRA annually, which helps ensure transparency and accountability.
When to Seek Independent Advice
Decisions about interest payments can be complex, particularly where the insurer disputes the claim or provides incomplete documentation. If a claimant believes they are entitled to interest but the insurer has not paid it, or if the insurer’s calculation is incorrect, they should seek independent legal advice. This is especially important in Greater Sydney, where claim volumes are high and insurer practices may vary.
An independent review can help determine whether the insurer’s decision was correct under the MAIA, whether the interest rate was applied correctly, and whether the claimant has a valid basis for a formal complaint or legal claim.
Next Steps for Claimants
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.