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).
Post-traumatic stress disorder (PTSD) following a motor vehicle accident in New South Wales may be recognised under the Compulsory Third Party (CTP) insurance scheme, but claimants must meet strict time limits and procedural requirements. In Greater Sydney, as across NSW, the Motor Accident Injuries Act 2017 (MAIA) governs claims for psychological injuries, including PTSD, resulting from a motor accident. The law does not distinguish between Greater Sydney and other regions for the core time limits, but local factors such as access to treatment and evidence collection may affect a claim’s strength.
A claim for PTSD must be made within the timeframes set out in the MAIA and administered by the State Insurance Regulatory Authority (SIRA). The primary time limit for starting a claim is three years from the date of the motor accident. This is a fixed deadline under section 44 of the MAIA. Missing this date generally means the claim cannot proceed unless an extension is granted by a court, which is rare and requires strong justification.
In addition, a claim for compensation for psychological injury must be notified to the insurer within 60 days of the accident, or as soon as practicable. While this 60-day notice period is not a strict bar to a claim, failing to notify within this timeframe may affect the insurer’s ability to investigate and may result in a claim being denied or reduced. The insurer must be informed that a psychological injury is suspected, even if symptoms are not yet diagnosed.
SIRA’s guidance confirms that PTSD is a recognised psychological injury under the CTP scheme. To qualify, the injury must be caused by the motor accident and not pre-exist. The injury must also be clinically diagnosed by a qualified medical practitioner, such as a psychiatrist or clinical psychologist, using recognised diagnostic criteria such as those in the DSM-5 or ICD-11. The claimant must provide medical evidence showing that the PTSD symptoms are directly linked to the accident, not to unrelated life stressors.
The legal framework distinguishes between statutory benefits and damages. Statutory benefits, including treatment and care, and weekly income payments, are available regardless of fault. However, to claim damages for pain and suffering, loss of enjoyment of life, or future care needs, a claimant must meet the threshold for a serious injury under the MAIA. PTSD may qualify as a serious injury if it results in a whole person impairment (WPI) of 10% or more, as assessed under the Motor Accident Guidelines.
Where PTSD is diagnosed but does not meet the threshold for a serious injury, the claimant may still receive statutory benefits for up to 52 weeks. After this period, benefits may cease unless the injury is determined to be a threshold injury under the MAIA. In that case, benefits are limited to 52 weeks, and no damages are available for the psychological injury alone.
A common mistake is assuming that PTSD symptoms appearing months after an accident are not compensable. The law allows for delayed onset. The time limit for starting a claim begins from the date of the accident, not when symptoms first appear. However, the claimant must still notify the insurer as soon as they become aware of the injury.
Practical steps that matter include:
- Seeking medical assessment from a mental health professional as soon as symptoms are noticed.
- Preserving all records of treatment, including therapy notes, prescriptions, and correspondence with healthcare providers.
- Documenting the accident, including any police report, photos of the scene, witness contact details, and a diary of how the injury affects daily life.
- Notifying the insurer within 60 days, even if a diagnosis is not yet confirmed.
A hypothetical example: A pedestrian in Sydney’s inner west was struck by a car in a crosswalk in February 2025. They experienced severe anxiety and flashbacks for the first time in June 2025, and were diagnosed with PTSD in August 2025. They notified their insurer in September 2025, within 60 days of the accident. The claim was made within three years, so it was not time-barred. The claim was supported by a psychological assessment showing a WPI of 12%, which met the threshold for a serious injury. The claimant was entitled to damages for psychological harm.
If a claim is denied or a dispute arises over eligibility, a claimant may apply to the Civil and Administrative Tribunal (NCAT) for a review. The tribunal can assess whether the injury qualifies, whether the time limits were met, and whether the insurer acted fairly. Legal advice is strongly recommended before initiating a review.
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