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.
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.
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.