On March 30 this year, the Motor Accidents Injuries Bill 2017 NSW was passed by parliament. This bill is significant as it replaces the current compulsory third party motor accidents scheme under the Motor Accidents Compensation Act 1999, therefore changing the ways in which injured parties are compensated for motor accidents.
Reviewing the processes and legislation that cover you in the event of an accident is usually only a priority once you've actually been involved in an accident. However, understanding what to do when an accident happens, and how you're covered financially and medically, can ease your mind during a stressful and difficult time.
In this comprehensive guide we'll cover exactly what's changing in the new laws, how the changes may affect you and what you need to do in the event of an accident.
When do the new laws take effect?
The legislation has been passed and commences on 1 December 2017. This guide will be updated as new information is released.
Get the latest updates on this legislation and more
What's changed in the new laws?
There are two significant changes to the motor accident laws in NSW. The first is that statutory benefits are available to any injured party involved in the accident, regardless of who's at fault. This includes wage loss, medical treatment and funeral expenses.
The second change is a reduction in the things you can claim damages for if another person was at fault, or if it was a blameless accident.
Statutory benefits
The new laws have changed the way you're compensated for a motor accident by the introduction of statutory benefits.
Previously entitlements were mostly dependent on which party was at fault and were primarily intended to cover the injured parties who weren't at fault. Under the new statutory benefits scheme, any person injured in the accident, regardless of fault, is entitled to receive statutory benefits that include:
- Wage losses
- Medical treatment
- Funeral expenses
Before we delve into details of these payments, it's important first to address some exclusions that apply.
These are:
- The at-fault driver's vehicle is uninsured
- The injured person commits a serious driving offence
- Workers' compensation is payable instead
- If you're residing outside of Australia (in some circumstances)
Ask an expert
How much will it cost to make a claim?
How long will it take to run the case?
What is a serious driving offence?
Like many legal terms, "serious driving offence" details a specific set of offences. These are:
|
|
If you are convicted or have been charged with any of the above offences, you are not eligible for statutory benefits. However, if you are acquitted of these offences, then you will be eligible, and may be entitled to be back paid from the date you were charged.
Weekly payments for loss of earnings
Wage loss
Injured parties are entitled to weekly payments in order to cover a loss of earnings due to the injuries sustained in the motor accident. These lost earnings could be salary, wages, commissions and other income you would normally receive on a regular basis.
In order to receive these payments, you need to be qualified as an "earner". In legal terms, an earner is somebody who is 15 years or older and:
- Was due to commence employment at a business, or self-employment; OR
- Was receiving a payment for loss of earnings under the workers' compensation scheme or the motor accidents scheme; OR
- Met one of three alternative employment criteria.
The person meets the employment criteria to qualify as an "earner" if he or she is 15 years or older and was employed:
- At any time during the eight weeks prior to the accident; OR
- For a period equal to 13 weeks in the year preceding the accident; OR
- For a period equal to 26 weeks in the two years preceding the acciden
How the payments work
These payments are sectioned into "entitlement periods" and calculated from the date of accident (DOA). The amounts payable are calculated as a percentage of the difference between your weekly earnings prior to the accident, and your weekly earnings after the accident. This is referred to as pre-accident and post-accident income.
For example, let's say your work relies on physical labour and you make $1,000 a week. You then injure your back in a motor accident and, because of your injuries, you can only earn $800 a week.
That means
Pre-accident income = $1,000
Post-accident income = $800
Difference = $200
Your weekly payments would then be worked out as a percentage of that $200 difference depending on which entitlement period you are in.
Entitlement period
First entitlement period (first 13 weeks following DOA)
Employed
During the first 13 weeks following your accident, regardless of fault, you're entitled to 95% of the difference in your pre-accident and post-accident income. In the above example, that would be equal to $190 per week (95% of $200).
University students
If, at the time of the accident, you were a full-time university student, then you will be classified as an earner from the time you would have completed your studies. Your pre-accident income from that time is calculated based on what you would have earned on the completion of your studies.
Students
If, at the time of the accident, you were a full-time student, then you will be classified as an earner from the time you would have completed your studies and reached the age of fifteen. Your pre-accident income from that time is calculated based on what you would have earned on the completion of your studies.
Apprentices, trainees and young people
If, at the time of the accident, you were under the age of 21 years or were a trainee or apprentice and you would have expected your earnings to increase because of your age or the terms of your contract, then your payment may be increased accordingly.
Second entitlement period (14 - 78 weeks following DOA)
Your payment in the second entitlement period depends on whether your are totally or partially incapacitated:
- Total incapacity
means that you are totally unfit for work because of your injuries
- Partial incapacity
means that you are fit for some, but not all of your usual work because of your injuries
In the event of total incapacity, you will receive 80% of the difference between your pre-accident income and post-accident income. In the example above you would have to assume that there is no ability to earn $800 after the accident and therefore your loss is $1,000 per week. That would then entitle you to $800 per week (80% of $1000).
In the event of partial incapacity, you will receive 85% of the difference between your pre-accident income and post-accident income. Using the above example, that would equate to $170 per week ($1000 pre-accident income, reduced to $800 because of partial incapacity, meaning a loss of $200. 85% of $200 = $170).
Conditions that stop or reduce payments after 26 weeks following DOA
Once you reach 26 weeks (six months) after the date of accident, your payments may be stopped or reduced depending on how serious your injuries are and whether you were at fault in causing the accident or were contributorily negligent.
Minor injuries
If your injuries are minor injuries, then your payments will cease completely after 26 weeks.
Minor injuries are soft tissue injuries. This means injuries to the tissue that connects, supports, or surrounds other structures or organs of the body, like:
|
|
However, the definition of "minor injuries" excludes injury to nerves or a rupture of a tendon, ligament, menisci, or cartilage (complete or partial).
Your doctor should document your injuries and provide you with a medical certificate indicating the extent of them.
Exceptions to the definition of minor and non-minor injuries will be published shortly and you should seek legal advice if you believe that your injury has been incorrectly classified by your insurer.
At fault
If you were wholly or mostly at fault for the accident, then your payments will cease completely after 26 weeks.
"Mostly at fault" is defined in the new law to mean that the contributory negligence of a person was 61% or more. This refers to a blame percentage that is attributed to the people involved in a motor accident.
An example may be where one driver exits a driveway onto a street and is hit by another car. While the car on the street failed to stop in time, and thus caused damage, it could be argued that the car leaving the driveway failed to properly scan the road for hazards and ultimately was more to blame.
However, this is a simplified example. In the real world, the attribution of blame depends on all the circumstances of the incident and no two cases are the same.
The insurance company will tell you if they consider that you were mostly at fault. You may dispute this if you do not agree.
Living outside Australia
An injured person who resides outside of Australia (whether you have moved after the accident, or have returned to your country of origin) is not entitled to weekly statutory benefits, except in the following cases:
- The Dispute Resolution Service has determined that your loss of earnings is likely to be permanent (due to the severity of the injury, for example); AND
- You comply with any additional requirements that may be set out in the motor accident guidelines to be issued in the coming months. (This guide will be updated when that information is available).
Reduction in payments
Reduction in payments
Contributory negligence
Your payments will be reduced after 26 weeks (six months) from the date of accident if the accident was partly your fault ("contributory negligence").
This could be due to:
- Alcohol or drug impairment
- Being a voluntary passenger of a driver who is impaired by alcohol or drugs
- Not wearing a seatbelt
- Not wearing a helmet (if applicable)
- Willingly placing yourself in danger (known as volenti non fit injuria, translated as "to a willing person, injury is not done") - for example, if you were car surfing.
Third entitlement period (after 78 weeks)
Payments for loss of earnings will only continue after 78 weeks (1.5 years) if you meet the following conditions:
- You are over the age of 18 (regardless of earner status); or
- You are under the age of 18 but classified as an earner
These age conditions are calculated at the date of the entitlement, not the date of the accident.
When do payments stop after 78 weeks?
If you are still receiving payments after 78 weeks, then your payments will stop:
- After 104 weeks
(two years) if you do not have a claim for damages pending
- After 156 weeks
(two and a half years) if you have a damages claim pending but your "whole person impairment" (WPI) is less than 10%."Whole person impairment" is calculated according to specific guidelines by a specialist doctor. You cannot calculate your WPI yourself.
- After 260 weeks
(five years) if you have a damages claim pending and your WPI is greater than 10%.
- Upon reaching retirement age + 12
months.
In Australia there is no set retirement age, However, Centrelink determines your eligibility for the "Age Pension" as being between 65 and 67 years of age, depending on your date of birth:
| Birth date range | Required age for the age pension |
| 1st July 1952 - 31st December 1953 | 65 years and six months |
| 1st January 1954 - 30 June 1955 | 66 years and six months |
| 1st July 1955 to 31 December 1956 | 66 years and six months |
| From 1st January 1957 | 67 years |
Failure to comply
Your payments will be reduced after 26 weeks (six months) from the date of accident if the accident was partly your fault ("contributory negligence").
Tip: If you're not taken to hospital following the accident, you should still visit your doctor as soon as possible, both for treatment and to record your injuries shortly after the accident. This will greatly aid your claims and insurance processes.
Payments for treatment and care
Now that we have covered the benefits received based on your loss of earnings, we can turn our attention to the benefits payable for the treatment and care of injuries sustained in a motor accident.
Medical and treatment expenses
If you're injured in a motor accident, then you're entitled to medical and treatment expenses provided that they are "reasonable and necessary". Your doctor may need to provide a letter or certificate to the insurer confirming that the treatment is reasonable and necessary.
Domestic services
If you need to pay for someone to help you around the home as a result of your injuries, known as domestic services, then this may be covered as long as you require it for a minimum of six hours per week continuously for six months or more. These types of tasks could be general cleaning, mowing the lawn, or other domestic assistance tasks that you are unable to complete by yourself because of your injuries.
There are no statutory benefits for "gratuitous attendant care", which refers to help from a non-professional carer like a friend or family member, ie someone you wouldn't pay to help care for you.
Travel and accommodation
If you have to travel to attend treatment, then you are entitled to claim the travel and accommodation expenses that you incur in attending treatment.
If you are under the age of 18, have a disability, or the extent of your injuries means that you need a special assistant when travelling, then expenses incurred by a parent or carer can also be claimed.
When do payments for treatment and care stop?
At fault or mostly at fault
Payments for treatment and care stop after 26 weeks (six months) if you were at fault or mostly at fault for the accident and you were over 16 years of age.
Minor injuries
Payments for treatment and care stop after 26 weeks (six months) if your injuries are classified as minor.
Exclusion from treatment and care benefits
Lifetime Care and Support Scheme
You are not entitled to payments for treatment and care if you are participating in the Lifetime Care and Support Scheme.
Living outside Australia
You are not entitled to payments for treatment and care if you are living outside Australia. If you move overseas or return to your home country outside Australia then your payments would stop. If you were injured while on holidays in Australia then you may be entitled to statutory benefits until you return home.
Funeral expenses
If the motor accident results in death, funeral expenses are covered by statutory benefits.
Damages
We've now covered the changes to statutory benefits, who is covered and for how long.
In this next section, we're going to move on to damages, which is another common matter involved in motor accidents.
What are damages?
"Damages" is a sum of money claimed as compensation for losses arising from injuries sustained in an accident
What are damages?
Damages may be payable if:
- You have been injured in an accident and a driver or owner of a vehicle, other than you, was partially or completely at fault. This includes if you were a driver, a passenger, a pedestrian, a cyclist, a motorcyclist or pillion passenger; or
- You have been injured in a "blameless accident", for example, an accident when a driver suffers a heart attack or stroke, or an unavoidable collision with an animal on the road, or an unexplained mechanical failure; and
- Your injuries are more than minor injuries.
What type of losses can claim for?
You can claim damages for:
- Economic loss; and
- Non-economic loss
Economic loss damages
Economic loss, as you may have guessed, is the financial loss you suffer because of the injuries you sustained in the motor accident. Damages are claimed based on your net (after tax) losses and you do not have to pay tax on them.
The economic loss damages you can claim for are:
- Past loss of earnings (including superannuation)
- Future loss of earnings or impairment of earning capacity (including superannuation)
- The cost of financial management of any damages that are awarded to you, for example, if you require professional assistance in managing your money because you are under the age of 18 or are mentally impaired
- Reimbursement of tax paid or payable on workers' compensation benefits
Non-economic loss damages
Non-economic loss damages is an amount of money to represent the pain, disability, loss of enjoyment of life, disfigurement or associated circumstances that you suffer because of your injuries.
Non-economic loss is only payable to you if your whole person impairment is greater than 10%.
How to claim statutory benefits and damages
In order to claim statutory benefits, you will need to follow some reasonably simple procedural steps and adhere to some important time frames. Failing to do so could make your claim significantly more difficult, or void your entitlement entirely.
If you are claiming both statutory benefits and damages, you must lodge them separately.
Motor accident verification
If you are claiming statutory benefits or damages, you must comply with the verification requirements. At the time of writing, these verification requirements have not been issued. However, at present your requirement is to notify the police of the accident within 28 days.
We will update this guide when those verification requirements are announced.
Claiming statutory benefits
In order to claim statutory benefits, a "notice of claim" needs to be lodged with the relevant insurer. The relevant insurer is:
- The insurer of the motor vehicle if there is only one vehicle involved;
- The insurer of the at-fault motor vehicle if more than one vehicle is involved (if more than one vehicle is at fault, then the one which was most at fault);
- The nominal defendant if the motor vehicle was uninsured or unidentified.
Time frames for statutory benefits
You need to lodge a claim with the insurer to claim your statutory benefits. There are time frames for doing so. There will be guidelines released in the coming months that outline specific claim forms and further details. We will update this guide when those are available.
28 days
It is in your best interests to submit your claim to the relevant insurer within the first 28 days after the accident. This will ensure that you can receive weekly payments from the date of the accident.
If you do not submit your claim within the first 28 days, your weekly payments will only be payable from when you make that claim, not from the date of the accident, so you could lose some benefits.
Within three months
While the 28 day timeframe is optimal, you must make your claim within three months of the date of the accident. Just remember that if you submit your claim after 28 days, then you're only entitled to payments from the date you submitted your claim, not from the date of the accident.
After three months
You can still lodge a claim with the insurer outside three months but you may not be entitled to payments unless:
- You can provide a full and satisfactory explanation for the delay in lodging your claim; AND
- Your claim is made within three years; or
- Your permanent impairment is greater than 10% or the claim relates to death.
Insurer's response
Your insurer must give you notice as to whether they will accept liability for the first 26 weeks of statutory benefits payments within four weeks from your claim submission.
Furthermore, your insurer must give you notice if they accept liability for payments after the first 26 weeks within three months from the date you submitted your claim.
Disputes about statutory benefits
If you disagree with a decision of the insurer then you can dispute that decision.
The types of things you might disagree with the insurer about include:
- The amount of your pre-accident income or earning capacity
- Whether you were an "earner" before the accident
- Whether your injuries are "minor injuries"
- Whether the motor accident was caused partly or wholly by your fault
- Whether, and how much, you were contributorily negligent
- Whether your injuries result in greater than 10% whole person impairment
- Whether your treatment is reasonable and necessary
- Whether you require paid domestic services
How do I dispute the insurer's decision?
Step 1: Request an internal review
The first step is to request an internal review of the decision. This simply means asking the insurer to review their decision.
The insurer has 14 days to complete the review and notify you of the results of their review.
Step 2: Refer to Dispute Resolution Service
If the insurer does not change their mind or you are still unhappy with their decision, you can refer a dispute to the Dispute Resolution Service.
It-s worth noting here that should you need to dispute an insurer's decision, you will have almost certainly sought legal advice. If you haven't yet done so, and are considering disputing an insurer's decision, then speak to a lawyer first.
Claiming damages
To claim damages you first need to give notice of the claim to the insurer. This is separate to your claim for statutory benefits.
Time frame for changing damages
Within three years
Your damages claim must be made within three years of the date of your motor accident. This is important because if you attempt to claim outside the three year period, then you'll need to provide a full and satisfactory explanation for your delay and may lose your right to claim altogether.
After 20 months
You have to wait for 20 months from the date of your accident before you can claim for damages unless:
- The claim is for the death of a person; or
- Your whole person impairment is greater than 10%.
On this topic, it's also worth noting that the claim cannot be settled within two years of the date of the accident unless you meet one of the above two exceptions.
Submission of relevants particular
After the claim has been made, you must submit what's known as "relevant particulars". The relevant particulars of your claim are the full details of the accident, the nature of your injuries and disabilities, and the details of all your losses.
For example these may be:
- Accident report (referred to as an Event Report by the police)
- Injury report, including disabilities, impairments and your WPI if applicable (provided by a doctor)
- Record of economic losses
- Record of non-economic losses (NEL)
If you fail to do so by 30 months (two and a half years) then the insurer can formally request that you supply the necessary information. It is in your best interests to provide these details at the earliest opportunity because otherwise you can lose your right to claim.
Insurer offer
Once you have provided all the particulars of your claim, the insurer is required to make an offer as soon as practicable, unless they wholly deny liability for your claim.
The insurance company cannot delay making an offer based on insufficient particulars unless they request further particulars from you within two weeks of you supplying all the relevant particulars to them.
Dispute resolution process for damages
Claims assessment by the Dispute Resolution Service
Once you and the insurer have used your best endeavors to try to settle your claim, if you haven't been able to reach agreement then you can refer your claim for assessment to the Dispute Resolution Service. This must be done within three years of the date of the accident.
In some circumstances you can be exempt from this step. Instead you will need to get a Certificate of Exemption from the Dispute Resolution Service and then commence court proceedings. You might be exempt from the claims assessment process if, for example, the insurance company wholly disputes liability for your claim.
Court proceedings
Most matters will be resolved through the claims assessment process, but if your claim is an exempt claim then you may commence court proceedings.
If you are unhappy with the assessment of your damages made by the Dispute Resolution Service then you can commence court proceedings.
You must commence court proceedings within three years of the date of accident. The three years is paused while your claim is referred to the Dispute Resolution Service for assessment or for the issue of a Certificate of Exemption.
If you do not commence court proceedings within three years of the date of accident, then you may lose your right to claim altogether except in limited circumstances.
When do the new laws take effect?
While the legislation has been passed, at the time of writing this guide the commencement date has not yet been announced by the NSW government. Once the commencement has been announced, there will presumably be Motor Accident Guidelines and Regulations to complement the legislation. This guide will be updated as soon as that information is released.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
