Understanding Late Payment Interest in NSW CTP Claims
If a CTP insurer in New South Wales fails to pay a statutory benefit on time, interest may be payable under the Motor Accident Injuries Act 2017. This interest is not discretionary, it is a legal obligation that arises when an insurer does not pay a benefit within the time required by law. The interest is calculated at a rate set by the NSW Government and applies to the amount of the unpaid benefit. It is intended to compensate claimants for the financial loss caused by the insurer’s delay.
The Motor Accident Injuries Act 2017 and the Motor Accident Injuries Regulation 2017 set out the rules for payment timing and interest calculation. These rules apply to all statutory benefits, including treatment and care benefits, weekly income payments, and lump sum payments for permanent impairment. The interest is not limited to claims involving fault, it applies regardless of whether the claimant was at fault, a passenger, pedestrian, or cyclist.
How Delayed Payments Affect Treatment and Rehabilitation Planning
When an insurer delays payment of treatment and care benefits, it can disrupt the planning and delivery of medical and rehabilitation services. These benefits cover the cost of necessary medical treatment, allied health services, and rehabilitation programs. A delay in funding means that claimants may face a gap in care, which can affect recovery outcomes.
For example, a claimant in Greater Sydney may need physiotherapy to regain mobility after a motor vehicle accident. If the insurer delays payment of the treatment benefit, the claimant may be unable to book sessions in a timely manner. This can lead to a delay in recovery, increased pain, and potentially worsened long-term function. In some cases, the claimant may need to pay for treatment out of pocket, which creates financial pressure and may result in treatment being postponed or cancelled.
SIRA’s guidance on claim handling confirms that insurers must act promptly to assess and pay claims. Delays in processing or paying benefits are not permitted under the statutory framework. The Motor Accident Injuries Act 2017 requires insurers to pay benefits as soon as practicable after a claim is accepted. Failure to do so may result in interest being payable on the unpaid amount.
Evidence and Practical Steps to Support a Claim for Interest
To claim interest on a late payment, a claimant must demonstrate that the insurer failed to pay a benefit within the time required by law. The following evidence is typically relevant:
- A written record of the insurer’s acceptance of the claim and the date it was received.
- The date the insurer was notified of the claim and the date it was formally accepted.
- The date the insurer was required to pay the benefit under the Act (for example, within 14 days of accepting a claim for treatment and care benefits).
- The date the insurer actually made the payment.
- A copy of the insurer’s correspondence confirming the delay.
Medical records, treatment plans, and invoices for services received during the delay period can also support the claim. These documents show that the treatment was necessary and that the delay caused a gap in care. In Greater Sydney, claimants may access specialist rehabilitation services through networks approved under SIRA’s treatment and care framework. Delays in funding can prevent timely access to these services.
Time Limits and Dispute Procedures
There is no fixed time limit for claiming interest on a late payment, but it is advisable to raise the issue as soon as the delay is identified. The claimant must keep a record of all communications with the insurer, including emails, letters, and call logs. If the insurer refuses to pay interest, the claimant may request a review of the decision or apply to the NSW Civil and Administrative Tribunal (NCAT) for a determination.
SIRA provides guidance on dispute resolution and claim handling. Claimants who believe their insurer has failed to pay a benefit on time should contact SIRA’s claims information line or visit the SIRA website for assistance. SIRA does not represent claimants, but it provides information on rights and processes under the Motor Accident Injuries Act 2017.
Hypothetical Example: Delayed Treatment Funding in Sydney
A pedestrian in Sydney was struck by a car in a car park in July 2026. The claim was accepted by the CTP insurer in August 2026. The insurer was required to pay treatment and care benefits within 14 days of acceptance, but did not make the payment until November 2026. During that period, the claimant was unable to access a recommended rehabilitation program. The claimant incurred out-of-pocket expenses for private physiotherapy and experienced a setback in recovery.
The claimant submitted a formal request for interest on the unpaid benefits. The insurer initially refused, citing internal processing delays. The claimant then obtained a written assessment from their treating medical practitioner confirming the treatment was medically necessary and that the delay had caused a delay in recovery. The claimant submitted this evidence to SIRA and requested a review. SIRA confirmed that interest was payable under the Act.
When to Seek Independent Advice
Every claim depends on its own facts. The availability and amount of interest on a late payment depends on the timing of the claim, the nature of the benefit, and the insurer’s actions. The legal framework is clear, but the application of the law to individual circumstances can vary.
If a claimant is facing a delay in treatment funding, or believes an insurer has failed to pay a benefit on time, they should consider seeking independent advice. A legal practitioner with experience in CTP claims can assess whether interest is payable, help gather evidence, and assist in making a formal claim.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.