How Psychological Treatment Plans Are Funded in NSW CTP Claims
If you have sustained a psychological injury in a motor accident in Greater Sydney, you may be eligible for funding to cover the cost of a psychological treatment plan through the Compulsory Third Party (CTP) insurance scheme. This funding is available under the Motor Accident Injuries Act 2017 (NSW), which governs all CTP claims in New South Wales. The scheme provides for treatment and care benefits, including psychological services, when they are deemed reasonable and necessary in relation to injuries arising from the accident. This includes treatment plans developed by a qualified mental health professional, such as a clinical psychologist or psychiatrist, that are approved by your CTP insurer or, if disputed, by the State Insurance Regulatory Authority (SIRA).
Legal Basis for Funding Psychological Treatment
Under the Motor Accident Injuries Act 2017, you are entitled to treatment and care benefits for psychological injuries that result from a motor accident, provided they are directly related to the accident and not pre-existing. These benefits cover the cost of psychological treatment, including assessment, therapy sessions, medication management and any recommended rehabilitation services. The treatment must be delivered by a registered health practitioner and must be part of a formal treatment plan that outlines the nature, duration and expected outcomes of the intervention.
Funding is not automatic. Your insurer will assess whether the treatment plan is reasonable and necessary. This assessment considers whether the treatment is consistent with accepted clinical practice, whether it is likely to improve your condition, and whether it is proportionate to the nature and severity of your injury. If your insurer refuses to fund a treatment plan, you may request a review or apply to SIRA for a determination.
Practical Steps to Secure Funding
To increase the likelihood of your psychological treatment plan being funded, you should:
- Obtain a formal assessment from a registered mental health professional, such as a clinical psychologist, who can confirm that your psychological injury is attributable to the motor accident.
- Submit a completed treatment plan to your CTP insurer, including details of the provider, frequency and duration of sessions, and a clinical justification for the recommended interventions.
- Provide supporting medical evidence, such as a mental health assessment report, records of therapy sessions, and any correspondence with your treating practitioner.
- Keep a record of all communications with your insurer, including emails, letters and call logs.
In Greater Sydney, access to mental health services is widespread, but insurers may challenge claims based on perceived overuse or lack of clinical justification. Ensuring your treatment plan is evidence-based and aligned with the Motor Accident Guidelines is critical.
Evidence That Supports Funding
The following types of evidence are commonly relied upon to support a claim for psychological treatment funding:
- A clinical report from a psychologist or psychiatrist detailing the diagnosis, the link to the motor accident, and the recommended treatment.
- Documentation of symptoms, such as anxiety, depression, post-traumatic stress or sleep disturbance, that began or worsened after the accident.
- A treatment plan that specifies the type of therapy (e.g., cognitive behavioural therapy), the number of sessions, and the expected recovery timeline.
- Evidence of functional impairment, such as difficulty returning to work, reduced capacity for daily activities, or social withdrawal.
If your injury involves a threshold injury (such as a soft tissue injury with neurological signs), the treatment must still be reasonable and necessary. The Motor Accident Guidelines define threshold injuries and set criteria for eligibility, but psychological injuries are not subject to the same threshold rules as physical injuries.
Time Limits and Procedural Requirements
There is no fixed time limit for applying to have a psychological treatment plan funded, but it is advisable to submit your request as soon as possible after the accident or after a diagnosis is made. Delays may affect the insurer’s ability to verify the connection between the injury and the accident.
If your insurer refuses to fund a treatment plan, you must request a review within 28 days of receiving the refusal. If the review is denied, you may apply to SIRA for a determination. SIRA has the authority to decide whether a treatment plan is reasonable and necessary and to order funding accordingly.
When to Seek Independent Advice
While the CTP scheme is designed to cover reasonable psychological treatment, disputes over funding are common. If your insurer denies a treatment plan, or if you believe the proposed treatment is inadequate, it is advisable to seek independent legal or clinical advice. A qualified solicitor can assist with preparing a submission to SIRA, while a second opinion from a mental health professional may strengthen your case.
A hypothetical example: A 38-year-old office worker in Sydney’s inner west was involved in a rear-end collision in a car park in February 2026. Following the accident, she developed persistent anxiety, flashbacks and difficulty concentrating. Her psychologist diagnosed her with post-traumatic stress disorder and recommended 12 sessions of trauma-focused cognitive behavioural therapy. The insurer initially refused to fund the plan, citing a lack of evidence of functional impact. After the claimant submitted a detailed report from her psychologist and a letter from her employer confirming her reduced work capacity, the insurer agreed to fund the treatment.
Next Steps
Every claim depends on its own facts. The availability of funding for psychological treatment under CTP depends on the nature of the injury, the quality of the treatment plan, and the strength of the supporting evidence. Time limits and procedural requirements may apply, particularly if a dispute arises.
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