CTP Greenslip Scheme Reforms – Second Reform Commences 1 April 2010

Reforms to the CTP greenslip scheme by the NSW State Government are having a fundamental impact on the operation of the scheme.  The second of two major reforms commences on 1 April 2010.

The reforms impose new costs on the CTP greenslip scheme, provide additional benefits for at fault drivers and result in higher greenslip prices.

The Government first signalled its intention 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 reforms go beyond the intention stated in the November 2008 State Mini Budget.

Prior to the reforms, the at fault driver in a motor vehicle accident was not covered by the CTP greenslip scheme, unless the driver was catastrophically injured.

To implement the reforms the government introduced new legislation in May 2009.

Two major reforms

There are two major reforms to the operation of the CTP greenslip scheme as a consequence of that legislation.

1. The first reform is already effective and applies to accidents occurring from 1 July 2009, so that hospital treatment, transport by ambulance and other treatments for at fault drivers is funded by the CTP greenslip scheme.

2. The second reform, effective for accidents occurring from 1 April 2010, provides that at fault drivers will also be entitled to compensation through lodgement of an Accident Notification Form (ANF).  Subject to the provisions, at fault drivers will become entitled to claim up to $5,000.00 for treatment expenses and for lost earnings by lodging an ANF.

In summary, 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 from 1 April 2010 at fault drivers will be entitled to claim up to $5,000.00 through an ANF for treatment expenses and for lost earnings.

The Government has reduced costs on the public hospital system by transferring the cost of treating at fault drivers to the CTP greenslip scheme.

The precise cost of the reforms to the CTP greenslip scheme is not clear.

Cost savings

The November 2008 State 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 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 reforms have increased the cost base of the NSW CTP greenslip scheme and have resulted in increased greenslip prices.

Insurers are required to lodge submissions to the Motor Accident Authority (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 MAA has advised “the combined impact of the bulk billing and no-fault ANF reforms is approximately $10 per Green Slip”.

Interestingly, the government has extended the scheme to include at fault drivers!up to a point. People injured in a motor vehicle accident, other than the at fault driver, are entitled to benefits under the CTP greenslip scheme in excess of those available to an at fault driver, despite the changes to the legislation.

Final consequence

A final unknown, but not insignificant, consequence of the reforms is the impact on at fault driver cover.  At fault driver cover is an additional feature offered by five of the seven greenslip insurers. Through at fault driver cover insurers pay specified benefits for specified injuries which the driver at fault may sustain in a motor vehicle accident.

As at 8 March 2010 the at fault driver cover policy documents published by the insurers state that no at fault driver cover benefit will be payable where compensation is also paid or payable under the CTP greenslip scheme.  Unless the insurers change the terms of their at fault driver cover policies, from 1 April 2010 any at fault driver lodging an ANF for compensation will not be entitled to payment under the insurers at fault driver cover policy.

Detailed analysis of the legislation changes and the impact on the CTP greenslip scheme is available on this site.

CIC Allianz – No At-Fault Driver Protection Insurance and No Payment By Credit Card

In our blog of 2 February 2010 we explained that CIC Allianz no longer accepts payment by credit card. It does not offer at-fault driver protection insurance.

Go to head office

To purchase a CIC Allianz greenslip, CIC Allianz is advising potential customers to go to the Allianz head office at 2 Market Street Syndey and pay by cash or cheque.  This also applies to renewals.  You can pay by credit card through some brokers or agents who sell CIC Allianz greenslips, however CIC Allianz will not help you find a broker or agent.

CIC Allianz do not offer an online service to purchase or renew your greenslip.

If you find a broker or agent, or make it in to Market Street in Sydney, you need also be aware that CIC Allianz is no longer issuing At-Fault Driver Protection Insurance with its CTP greenslips.

It seems CIC Allianz is doing all it can to discourage customers other than business or fleet customers.

NSW Driver Demerit Points Change From 1 July 2009

The Minister for Roads, Michael Daley, has introduced a new demerit point system in NSW with effect from 1 July, 2009.

Demerits and penalties apply

For unrestricted drivers the following demerits and penalties will now apply:-

  • 1-10 kmh over the speed limit will attract 1 demerit point & $84 fine
  • 11-20 kmh over the speed limit will attract 3 demerit points & $197 fine
  • 21-30 kmh over the speed limit will attract 4 demerit points & $338 fine
  • 31-45 kmh will result in a 3 month suspension, 5 demerit points & $647 fine
  • Over 45 kmh will result in a 6 month suspension, 6 demerit points & $1,744 fine.

“The new bands have been designed to drive down the number of speeding-related deaths and injuries by better reflecting the seriousness of the offence”, he said.

Consequently, motorists with an unrestricted licence who inadvertently drift over the speed limit by less than 10 km/h will now have less demerit points, but motorists that speed in excess of 20 km/h will attract more demerits and heavier fines than before.

P-plate drivers

Speeding by P-plate drivers is of particular concern to the Government. P2 drivers will now be subject to 1 extra demerit point if they are just 1km/h over the speed limit. This means a P2 driver will lose their licence if they get 2 speeding tickets, while P1 drivers will lose their licence if they get 1 speeding ticket.

Speeding offences that occur in a school zone attract fines and demerit points in addition to the above.

The total demerit points you can accumulate before your licence is suspended are as follows:-

  • Full unrestricted licence: 12 demerit points in any 3 year period.
  • P2 licence: 7 demerit points
  • P1 licence:4 demerit points.

The National Driver Licensing Scheme, adopted by NSW in March 1999, means that any speeding fines you get in another State shall be transferred back to NSW to be recorded on your licence. The appropriate number of demerit points shall be applied as if the fine was incurred in NSW.

To find out how many points you have remaining on your licence you can do an online search at the RTA.

State Govt Mini Budget – Greenslip Prices

In the Mini Budget speech given by the Treasuer Eric Roozendaal to Parliament yesterday, the Treasurer said,

“The Government will further reform the Greenslip scheme to provide hospital and ambulance coverage for at-fault drivers”.

Under the current scheme, at-fault drivers are not covered unless they are under 16 years of age or unless they are catastrophically injured (in which case they are covered under the Lifetime Care and Support Scheme).

Expanded scheme

Clearly the government is expanding the scheme as a way to reduce a cost burden on the hospital system. The burden will be transferred to insurers and greenslip purchasers and will translate to an increase in premiums. In the same speech, the Treasurer said,

“This extra coverage will add around $10 to the cost of the average green slip”.

The reality is that the impact on the cost of a greenslip will not be known until the changes to the scheme are implemented. The increase in the premium will be determined by the insurers, not by Mr Roozendaal.

The Mini Budget Paper (page A – 7) shows an estimated cost recovery for the government of $105,000,000 between 2009 and 2012.

The change to the scheme does transfer a cost burden from the government to insurers and greenslip purchasers. It will result in higher greenslip premiums. The potential benefit is that at-fault drivers, not normally covered by the scheme, will now be entitled to benefits under the scheme. More will be known when documentation of the reforms is available.


Registration Reforms

The RTA has introduced changes to the requirements for vehicle registration, effective 1 July 2008, including pink slips.

There are two main changes affecting vehicle registration.

Two changes

The first change is that new light vehicles are now exempt from requiring a vehicle safety inspection (pink slip) for the first five years, up from three years. The exemption now also includes light commercial vehicles, panel vans, caravans, trailers and four wheel drive vehicles with a compliance date of 1 July 2003 onwards.

The second change affects pink slips. Pink slips for vehicle safety inspections are now only issued electronically and are called e-Safety Checks. Authorised Inspection Stations are now called e-Safety Stations. The e-Safety Check will be transmitted electronically to the RTA.

The RTA says the aim of the changes is to save motorists time and money.

Both greenslips and e-Safety Checks will now be transmitted electronically to the RTA.

The changes, whilst simplifying the registration process, do pose some risk. Tyres are a good example. Tyres on many vehicles need to be replaced in less than five years. Vehicle safety inspections have been a good way of ensuring worn tyres are replaced. Without inspection for another two years, the risk of some drivers driving on dangerous tyres has increased.