The key objective of the Green Slip scheme is to provide support to people who are injured on NSW roads.
Under the current system, too much of the total premiums collected is spent on areas other than injured people. And the amount that is going towards injured people is skewed in favour of minor injury claims, leaving fewer funds for the more seriously injured.
There are also around 7,000 people injured on our roads each year who are unable to receive more than nominal benefits, as they are deemed ‘at fault’ in an accident, and are ineligible for the full CTP scheme.
Where is the money going under the current scheme?
Only 45 cents* of each $1 paid in premiums to CTP insurers goes to injured people. And of this amount less than half is going to the more seriously injured, a proportion which has declined significantly over the last 15 years because of a large increase in minor injury claims.
This is largely a result of the scheme’s current design. As a predominantly common law, fault-based scheme, the NSW CTP scheme is based on the need to establish fault and the cause of an accident.
This often requires complex investigations and expensive legal and medical advice. In addition, greater uncertainty and delays in claims settlement means that insurers are pricing in higher profit margins.
*Excludes GST and the Lifetime Care and Support levy
A higher proportion of CTP funds going to injured people
Independent research shows that the community expects a greater proportion of total premiums collected to go to injured people in benefit payments.
Under the reforms, 57 cents in every premium dollar collected will be returned to injured people as benefits, with two-thirds of this going to support those with more serious injuries.
Coverage for more people
The reforms will mean an additional 7,000 people (including 1,400 motorcyclists) injured on our roads each year will now be covered for necessary medical treatment, income support and commercial attendant care for up to six months.
These people were previously excluded from benefits beyond $5000 combined income and medical costs, as they were either ‘at fault’ or could not identify an ‘at fault’ person in the accident.