New CTP Scheme

Greens make CTP scheme fairer for injured people in motor accidents

17 May 2019

 After 6 months of negotiation, the ACT Greens have secured a range of significant changes to improve the Government’s new compulsory third party insurance (CTP) scheme.

A range of improvements have been negotiated that will help ensure people injured in motor vehicle accidents are properly cared for through the ACT’s CTP scheme. This is a much fairer scheme than the one originally proposed by the Government, and the improvements show the valuable role the Greens play as balance-of-power negotiators.

The CTP system needs to look after injured people, provide the treatment and support they need, and do it in a timely way. People shouldn’t have to spend years in a difficult and adversarial legal minefield, or battling powerful insurance companies.

The Greens argued that the Government’s original proposal had the potential for injured people to be left worse off, and to face too many barriers when navigating the new system. We were very clear with the Government that changes needed to be made before the Greens could support this new CTP scheme. We’ve now secured significant changes.

One of the biggest positives of the new scheme is that it will cover drivers who are unable to show someone else was at fault in the accident. This means a person who is injured due to a momentary lapse of attention, or because they hit an animal, for example, will be able to receive support and treatment for their injuries through the CTP scheme. Under the previous scheme these people had no means to seek financial support for what can be serious and life-changing injuries. Currently this impacts about 600 ACT residents per year, and it is excellent that the proposed new scheme will fix this.

One of the other main benefits of the proposed scheme is fewer claims going through protracted legal processes, and injured people getting faster access to the support and treatment they need. Many claims currently take years to resolve - on average nearly 4 years for large claims. In the new scheme, payments will begin as soon as the claim is lodged and insurers are required to cover certain costs while they assess the application. While it’s likely that many personal injury lawyers still won’t like the scheme, we think it is an overall win for Canberra’s travelling public.

The key improvements negotiated by the Greens are:

  • The scheme will be fairer for injured children and workers. Injured children still requiring treatment and injured adults still needing income benefits after 5 years will now be able to access common law despite having less than 10% ‘Whole Person Impairment’ (WPI).
  • The scheme will now provide options for injured people still requiring medical treatment after 5 years. These people will be eligible for a lump sum payment from their insurer which can also be arbitrated in ACAT. (This is for not-at-fault people with less than 10% WPI).
  • People who are of retirement age but were still working at the time of their accident will be able to access defined benefit income replacement payments for up to two years.
  • Income replacement payments for low income people who are injured will now include superannuation (previously this was excluded).
  • Changes to the bill will reduce the possibility of insurers rejecting claims because of late lodgement, and incentivise insurers to disseminate information about the CTP process.
  • Benefits will no longer be limited or removed for a range of people who were injured while committing certain traffic offences (even though this may have been completely unrelated to the accident), including: cyclists who were not wearing a helmet; drivers whose passenger wasn’t wearing a seatbelt; and situations where a blood test detected a driver’s past cannabis use but this didn’t necessarily impair the driver.   
  • Injured people who have separate physical and psychological injuries from their injuries can now receive quality of life payments for both injuries (previously this was limited to one or the other).
  • People injured in a motor vehicle while at work will now have up to 13 weeks to decide whether to receive benefits through the workers compensation scheme or CTP scheme.
  • Decisions about defined benefits decisions will be able to be appealed through ACAT, and a new division of ACAT will be established.
  • Insurance companies can receive far greater penalties for not complying with their obligations.

One of the Greens’ primary concerns was that the scheme was weighted too far in favour of well-resourced insurance companies. Several changes address this concern. There will be a Motor Accidents Injuries Commission and Commissioner who will have strong enforcement powers and, we are assured, adequate resourcing to ensure they can exercise proper regulation and supervision of insurers, of insurer profits, that they can obtain and publish adequate information, and that they can respond effectively to complaints.

The Greens also raised concerns about the ability of insurers to achieve super profits at the expense of accident victims. The legislation now includes a requirement for insurers to specify their profit margins. It also includes an ability for the Motor Accidents Injuries Commissioner to cap the profits or super profits of insurers in situations where the actual net profit differs from a reasonable industry net profit.

Another improvement is that all defined benefits decisions will now be able to be appealed through ACAT, and a new division of ACAT will be established. Insurers can’t be the final arbitrator of decisions about people’s benefits and care – it is important these can be resolved through an accessible tribunal like ACAT.

The Greens also asked for improved advocacy support for claimants, to help them navigate the system. Advocacy services will include community legal centres, but also broader community-based advocacy groups like ADACAS and COTA, and health groups such as Health Care Consumers ACT.

The revised CTP scheme was actually developed through a deliberative democracy process undertaken by a “citizens’ jury”. The ACT Greens have advocated for citizens’ jury processes, and in fact the Greens-ALP Parliamentary Agreement requires the Government to run these kinds of deliberative democracy processes to better involve the community in decision making. The CTP citizens’ jury consisted of 50 everyday Canberrans and the jury process was managed by a professional facilitator.  We believe the final CTP scheme, with the amendments, better implements the essential features recommended by the jury.

The final scheme is a significant change to the ACT’s previous CTP laws, and we’re pleased that it will be reviewed after three years of operation, at which point we can make any further improvements required.

We thank the Government for working through this process closely with the Greens; they have agreed to make important changes to their legislation and we think this is now a vastly fairer scheme.

“Considering the positives in the new model, including the development of its key principles by a citizens’ jury, the early access to treatment and benefits, and the inclusion of at fault drivers, I think the new scheme - with the significant improvements made by the Greens – will be an overall win for Canberra’s travelling public”

– Caroline Le Couteur MLA.

The new Motor Accident Injuries Act will take effect in February 2020.