CTP Green Slip Scheme Changes 2009 & 2010
Legislative changes to the CTP Green Slip Scheme have a fundamental impact.
In May 2009 the NSW State Government introduced several amendments to the Motor Accidents Compensation Act 1999 and to the Motor Accidents (Lifetime Care and Support) Act 2006. Some of the amendments to the Motor Accidents Compensation Act 1999 will have a fundamental impact on the operation of the CTP greenslip scheme in NSW.
The amendments expand the cost base of the scheme and provide additional benefits for at fault drivers.
Basis of the Scheme
Before looking at the amendments and the consequence of those amendments, it is necessary to look at some of the principles on which the scheme is based.
The CTP greenslip scheme in NSW is made up of two separate schemes.
1. The Third Party Insurance Scheme, regulated by the Motor Accidents Compensation Act 1999.
Under the Third Party Insurance Scheme, compensation is available where people are killed or injured as a result of an accident caused by the driver of a motor vehicle. The scheme is fault based, except for children less than 16 years of age and for people killed or injured in a blameless accident. Prior to the 2009 amendments, the Third Party Insurance Scheme specifically excluded the at fault driver and the driver in a blameless accident.
2. The Lifetime Care and Support Scheme, regulated by the Motor Accidents (Lifetime Care and Support) Act 2006.
The Lifetime Care and Support Scheme was introduced in October 2006. The scheme provides benefits for people catastrophically injured in a motor vehicle accident, regardless of fault. The at fault driver is included in the Lifetime Care and Support Scheme.
In summary, prior to the May 2009 amendments, the at fault driver in a motor vehicle accident was not covered by the CTP greenslip scheme unless the driver was catastrophically injured (in which case the Lifetime Care and Support Scheme applied). If the at fault driver was not catastrophically injured, the cost of treatment was met by the public hospital system or private health insurance.
People injured in a motor vehicle accident and entitled to claim under the Third Party Insurance Scheme can lodge a formal claim, or they can lodge an Accident Notification Form (ANF). The ANF was introduced to provide for faster payment of small claims.
An ANF must be lodged within 10 days of an accident. After lodgement of an ANF an injured person may be entitled to claim up to $5,000.00 for treatment expenses and lost earnings incurred within 6 months of an accident.
If an injured person lodges a formal claim, it must be lodged within 6 months of an accident. A formal claim can be lodged where the claim will exceed $5,000.00, and can include compensation which can not be claimed through an ANF. A formal claim can include hospital, medical and pharmaceutical expenses, rehabilitation expenses, attendant care services, respite care services, home modification, loss of earnings (past and future) and compensation for pain and suffering and loss of quality of life.
The Government signalled its intention to reform the scheme in the November 2008 State Mini Budget when it announced "The Government will further reform the Greenslip scheme to provide hospital and ambulance coverage for at-fault drivers".
The Mini Budget Paper (page A - 7) shows that by introducing the reforms, the Government estimated cost savings of $105,000,000.00 between 2009 and 2012.
The intention of the Government was to transfer the cost of treating at fault drivers from the public hospital system to the CTP greenslip scheme.
There are two major reforms to the operation of the CTP greenslip scheme as a consequence of the amendments to the legislation.
1. For accidents occurring from 1 July 2009, the bulk billing arrangements under section 54 of the Act have been expanded to include the cost of treatment for at fault drivers, so that hospital treatment, transport by ambulance and other treatments for at fault drivers is funded by the CTP greenslip scheme.
2. For accidents occuring from 1 April 2010 the right to claim using an Accident Notification Form under Part 3.2 of the Act has been expanded to include at fault drivers. Subject to the provisions, at fault drivers will be entitled to claim up to $5,000.00 for treatment expenses and for lost earnings by lodging an ANF. Also from that date, no person will be entitled to claim by lodging an ANF if their injury is the result of a serious offence committed by them.
In summary, for accidents which have occurred from 1 July 2009, the cost of treating at fault drivers in the public hospital system is funded by the CTP greenslip scheme, rather than being a cost on the public hospital system or on private health insurance and for accidents occurring from 1 April 2010 at fault drivers will be entitled to claim up to $5,000.00 through an ANF.
However, the amendments do not extend to at fault drivers the full benefits available to other people injured in a motor vehicle accident. For example, at fault drivers will not be entitled to claim for:
- Medical, pharmaceutical and rehabilitation expenses incurred outside a public hospital and which exceed the $5,000.00 ANF limit
- Attendant care services or respite care services
- Home modification
- Compensation for pain and suffering and loss of quality of life
- Past loss of earnings exceeding the $5,000.00 ANF limit
- Future loss of earnings
Effectively, the CTP greenslip scheme is no longer fault based in respect of hospital treatment, transport by ambulance and from 1 April 2010, claims through an ANF, but remains fault based in respect of other claims such as those listed above.
The precise cost of the amendments to the CTP greenslip scheme is not clear.
As stated above, in November 2008 the Government estimated the amendments would save $105,000,000.00 over three years between 2009 and 2012. The Motor Accident Authority has estimated that an additional 4,000 at fault drivers per year will now claim up to $5,000.00 through an ANF (Motor Accidents Authority of NSW, Annual Report 2008-2009, page 12).
Regardless of the actual cost, the amendments have increased the cost base of the NSW CTP greenslip scheme and have resulted in increased premiums.
Insurers are required to lodge submissions to State Insurance Regulatory Authority (SIRA), previously the MAA, at least once a year, setting out the greenslip prices they propose to charge. The submissions lodged in October 2009 incorporated the impact of both reforms. The reforms are reflected in greenslip prices currently being paid. In response to specific enquiries made by us, the then MAA advised that "the combined impact of the bulk billing and no-fault ANF reforms is approximately $10 per Green Slip".
Amendments to the scheme will also have an impact on at fault driver cover, an additional feature offered by three of the insurers. At the moment, policy documents setting out the terms on which at fault driver cover is offered state that no at fault driver benefit is payable under those policies if a benefit is also paid or payable under the CTP greenslip scheme. From 1 April 2010, benefits under the at fault driver cover policies may not be payable where an at fault driver lodges a claim through an ANF, unless the insurers revise the policy terms prior to that date.
Analysis of at fault driver cover and an explanation of the impact of the amendments on at fault driver cover are set out on this site.