What You Need To Know About the New NSW CTP Scheme
On 1 December 2017 the Motor Accident Injuries Act 2017 (NSW) came into force and replaced the compulsory third party motor accidents scheme under the Motor Accidents Compensation Act 1999 (NSW).
The new scheme represents a fundamental change for both legal practitioners and injured persons.
It is important to note that the new scheme will only apply to motor vehicle accidents that occur on or after 1 December 2017. Motor vehicle accidents that occurred before this date will still be covered under the old scheme.
The new scheme saw NSW move from a no-fault scheme to a hybrid system that allows at-fault drivers to make a claim for statutory benefits if they have been injured in a motor vehicle accident.
Statutory benefits are now available for all individuals injured in a motor vehicle accident for a period of 6 months, with certain exceptions.
The statutory benefits scheme covers weekly benefits and medical expenses.
If you were at-fault or mostly at-fault (more than 51% contributorily negligent), your statutory benefits will automatically cease after 6 months. Your payments will also cease after 6 months if you suffered a ‘minor injury.’
A ‘minor injury’ generally refers to soft tissue injuries and minor psychological injuries.
This type of weekly payment is available for ‘earners’ and covers a loss of earnings including salary, wages, commissions and other income. It is paid in accordance with the ‘entitlement periods’ and is calculated as a percentage of the difference in your weekly earnings before the accident and your weekly earnings after the accident.
For example, let’s assume you earned $1,000 per week before the accident and now you are earning $800 per week. This means the difference between your pre-accident and post-accident income is $200. Your weekly payments would then be worked out as a percentage of that $200 difference depending on which entitlement period you are in.
There are generally 3 entitlement periods:
First entitlement period: first 13 weeks following the accident
Second entitlement period: 14- 78 weeks following the accident
- To qualify for this period, you must have a total or partial incapacity to work
Third entitlement period: after 78 weeks
- After 104 weeks (2 years): benefits cease if you don’t have a pending damages claim
- After 156 weeks (2.5 years): benefits cease if have a pending damages claim but you are below 10% whole person impairment
- After 260 weeks (5 years): if you have a pending damages claim and you are above 10% whole person impairment
- Upon reaching retirement age + 12 months
Treatment and care expenses
The insurer will still be liable to pay for your “reasonable and necessary” medical treatment expenses (including commercial care).
However, there are no benefits for ‘gratuitous care’ anymore, that is, help that is provided to you on a voluntary basis.
Time limits for statutory benefits
You should lodge your Personal Injury Claim Form within 28 days to ensure that you receive weekly payments from the date of the accident. Lodging after 28 days could mean that your weekly benefits become payable from the date of lodging your claim rather than the date of accident.
The limitation period to lodge your claim form is now down to 3 months from 6 months.
You can find the relevant claim forms here.
COMMON LAW DAMAGES
You will now need to lodge a separate claim for a lump sum claim for damages.
You can claim damages for:
- Economic loss;
- Non-economic loss.
Economic loss includes:
- Past loss of earnings (including superannuation)
- Future loss of earnings or impairment of earning capacity (including superannuation)
- The cost of financial management of any damages that are awarded to you
- Reimbursement of tax paid or payable on workers’ compensation benefits
Non-economic loss damages are only available if a medico-legal specialist assesses you as being over 10% whole person impairment. Non-economic loss damages are designed to compensate you for your pain and suffering.
Notably, at-fault drivers and injured person with ‘minor’ injuries cannot make a common law claim.
Time limits for common law damages
The limitation period for common law damages has remained the same at 3 years from the date of accident.
However, you will now have to wait 20 months from the date of the accident before making a claim for damages unless:
- Your claim is for the death of a person; or
- Your whole person impairment is greater than 10%
Your claim can now only be settled within 2 years if you meet the above exceptions.
Additionally, there is a 3 time limit which applies to lodging a Claims Assessment and Resolution Service (CARS) application.
What this means for lawyers:
Amongst an array of consequences for lawyers, the most notable is the reduced opportunity for lawyers to take on small claims. The intention is to discourage small claims, as the regulated costs are so low that consistently taking on small claims will become unsustainable.
The introduction of the Dispute Resolution Service as the dispute resolution mechanism for the statutory benefits scheme also means that lawyers will only be permitted to charge for their services if the injured person is under a legal incapacity or exceptional circumstances exist.
Even the value of common law claims is now reduced due to the limits on the heads of damages that can be claimed, namely economic and non-economic loss.
But what is the underlying cause of this CTP overhaul? Well, the two main factors seem to be the prevalence of fraudulent claims and increasing premium prices. The new scheme is said to be a response to the rise of exaggerated (‘soft’) fraud claims and outright fraudulent (‘hard’) claims. The added restrictions and thresholds in the scheme will essentially act as deterrents for both claimants and lawyers.
Importantly, lawyers are urged to familiarise themselves with the new laws and regulations as soon as possible so as to help injured persons navigate through their entitlements to compensation.
A definitive guide to the new scheme can be found here.
The team at Stacks Goudkamp are experts in running and maximising compensation claims. If you or somebody you care about has been involved in an accident, you may be entitled to compensation. For more information, and to arrange a free, no obligation assessment of your claim, please call Stacks Goudkamp on 1800 46 8362 or alternatively make an online enquiry.
Written by Sylva Dankha.