How CTP Insurers Calculate Interest on Late Payments in NSW
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).
If a CTP insurer in New South Wales delays paying statutory benefits such as weekly income payments or treatment and care benefits, they may be required to pay penalty interest under the Motor Accident Injuries Act 2017 (MAIA). This interest is not discretionary; it arises automatically when a payment is made more than 14 days after the insurer’s liability is established and the claimant has provided all necessary information to enable payment.
Interest is calculated at a rate set by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. As of 19 October 2026, the rate is 7.4% per annum, applied to the unpaid amount from the date the payment should have been made until the date it is actually paid. The insurer must calculate interest on a daily basis and pay it in addition to the original benefit amount.
What Factors Insurers Consider When Assessing Liability for Delayed Payments
Insurers assess liability for delayed payments based on when they became aware of the claimant’s entitlement under the MAIA. Liability is considered established when the insurer has received all required documentation, including a completed claim form, medical evidence, and proof of income loss (if applicable), and has not disputed the claim in writing.
An insurer cannot delay payment simply because they are investigating the claim. If the insurer has not issued a formal dispute or a notice of refusal within 21 days of receiving all required documents, they are legally obligated to pay the benefit within 14 days of that 21-day period ending. Failure to do so triggers the interest obligation.
Insurers may also assess liability based on whether the claimant has fulfilled their duty to provide information. If a claimant fails to provide medical reports, employment records, or a completed claim form, the insurer may delay payment without incurring interest. However, once all information is provided, the insurer must assess liability and make payment within the statutory timeframe.
How Claimants Can Challenge Improper Interest Calculations
If a claimant believes an insurer has incorrectly calculated or failed to pay penalty interest, they may request a review of the decision. The insurer must respond within 21 days of receiving a written request. If the insurer maintains its position, the claimant may apply to the State Insurance Regulatory Authority (SIRA) for a determination under the MAIA.
SIRA provides a formal dispute resolution process for claims involving interest, payment delays, or benefit disputes. Claimants may also seek assistance from a legal practitioner or an accredited dispute resolution service to review the insurer’s calculation and supporting documentation.
A common point of dispute is the start date for interest. The claimant may argue that interest should begin earlier, such as from the date the insurer received a complete claim form, rather than from the date of a later internal review. SIRA’s Motor Accident Guidelines clarify that interest begins from the date the insurer had all necessary information and was not entitled to withhold payment.
SIRA Resources and Guidance on Late Payment Interest
SIRA publishes detailed guidance on how insurers must assess and pay interest on delayed payments. The Motor Accident Claims and Making a Motor Accident Claim webpages outline the legal requirements and provide example timelines for when interest starts and how it is calculated.
SIRA’s What You Can Claim page confirms that claimants are entitled to penalty interest on any delayed statutory benefit payments. It also states that interest is not payable on damages, only on benefits under the CTP scheme such as weekly payments, treatment and care benefits, and lump sum payments for permanent impairment.
SIRA does not assess interest claims directly. Instead, it provides a framework for insurers to follow and a process for claimants to challenge decisions. The SIRA website includes a checklist for claimants to use when verifying an insurer’s interest calculation, including the date of claim submission, date of information receipt, and date of payment.
Practical Steps and Evidence That Matter
To support a claim for late payment interest, a claimant should preserve the following evidence:
- A copy of the claim form submitted to the insurer
- A record of all correspondence, including emails and letters, showing when documents were sent and received
- Medical reports and treatment records showing the date of injury and ongoing care needs
- Payslips or employment letters showing income loss
- The insurer’s written response, if any, confirming liability or disputing the claim
- A copy of the payment advice showing the actual date of payment
If the insurer has not responded within 21 days of receiving all documents, the claimant may treat the claim as accepted and begin calculating interest from the 22nd day after the final document was received.
When to Seek Independent Advice
Late payment interest claims often involve complex timelines and technical calculations. If an insurer disputes the claimant’s entitlement to interest, or if the claimant believes the interest amount is incorrect, independent legal advice is recommended.
A legal practitioner can review the insurer’s documentation, verify the start date for interest, and assist in preparing a formal dispute with SIRA. This is particularly important if the claim involves a threshold injury, a dispute over fault, or a claim for damages that may be affected by the timing of benefit payments.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.