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New CTP scheme refocuses on injured people

Drivers in NSW do not need reminding they pay the highest CTP premiums in Australia and their premiums have increased some 85% in 10 years. Reform to the NSW CTP scheme has been on the table for some time but finally, Premier Gladys Berejiklian and Minister for Finance, Services and Property Victor Dominello announced some detail on 7 March.

The main change is that all injured road users, whether they are at fault or not in an accident, will receive benefits in the first 6 months. They will be able to claim weekly income payments if they need time off work, medical and treatment expenses and commercial home care.

After 6 months, only people who were not at-fault in an accident and whose injuries were not minor can continue to receive benefits. They can also make common law claims.

Those with moderate injuries will be able to claim 2 years’ weekly income, or up to 3 years if they make a common law claim, plus reasonable medical, treatment and care expenses.

The seriously injured can claim up to 5 years’ weekly income plus reasonable medical and treatment expenses for life and will be able to make a common law claim that includes pain and suffering as well as past and future economic loss.

Objectives of reform

The reason for setting benefits for minor injuries rather than negotiating lump sums is it will provide injured people support straightaway and reduce the costly process of negotiation. This should help to reduce the price of green slips.

Minister Dominello claims the reformed CTP scheme will:

  • Give legitimately injured people faster access to benefits
  • Reduce exaggerated claims
  • Pay more of each premium to the more seriously injured
  • Make green slips up to $120 cheaper.

The legislation, if passed, will give more power to State Insurance Regulatory Authority to deal with fraud and to “monitor and regulate” insurer profits. Insurer profits have been around 19% each year, rather than the 8% stated to the regulator.

Government aims to reduce taxi premiums by up to $3,000 a year from around $7,500 and to charge premiums according to how far taxis and other point-to-point vehicles like Uber, actually travel. This may result in higher green slip prices for some Uber drivers.

The legislation is not due to start until December 2017. Until the legislation is public, and new compensation levels are introduced, nobody really knows what green slips will cost – and it is dangerous to speculate.