CTP Insurance Changes and Children

Posted on May 27, 2013

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This doesn’t make sense.

On 9 May, 2013 the Motor Accident Injuries Amendment Bill 2013 was introduced to the NSW Parliament. http://www.maa.nsw.gov.au/default.aspx?MenuID=515

The NSW Government is proposing changes to the NSW CTP insurance scheme which will leave 90% of innocent accident victims worse off and give drivers who cause their injuries compensation for the first time.

Under the current legislation, accident victims who can prove fault, recover all of their treatment expenses and all of their past and future lost earnings. Under the NSW Government’s proposed legislation, people suffering injuries of 10% Whole Person Impairment (WPI) or less will only get their medical expenses and loss of income covered for up to 5 years. 10% WPI sounds like a fairly minor injury, but it covers 90% of accident victims and includes injuries such as a surgically fused ankle, a disc prolapse in the lumbar spine with nerve root impingement causing radiculopathy (shooting pains) into the legs, a moderate traumatic brain injury and a moderate and disabling psychiatric injury.

If this wasn’t bad enough, the legislation gets even worse in the treatment of children.

Victims under 16 years currently receive treatment and care for life, but under the new scheme children under 10% WPI will receive no treatment after 5 years.

Meanwhile, if the driver who caused the injuries had over 10% WPI they will receive lifetime treatment expenses and a lump sum for pain and suffering.

Currently anyone 10 years and under, with WPI of 10% or less, receives compensation for the restriction in their future earning capacity, but under the new scheme they would not be able to recover lost earnings (like accident victims 10 years and over) as they would not have reached working age by the 5 year mark.

Meanwhile, the drivers who caused these injuries will receive compensation for future wage loss. Overall, some 7,000 drivers who cause accidents (technically called ‘at fault drivers’) will be covered by the CTP scheme for the first time.

In short, the NSW Government is taking money away from injured kids and other innocent victims to boost compensation to the drivers who have caused their injuries.

Truly bizarre.

Below is a quote from the Australian Lawyers Alliance and NSW Bar Association factsheet ‘CTP Changes’:

Statutory benefits
At fault drivers and their victims will receive:
• 95% of lost earnings, excluding superannuation, for 3 months. The current scheme provides innocent victims with 100% of full wage losses, including super.
• 80% of lost earnings, excluding super, for up to 5 years. Innocent victims can currently recover 100% of full wage losses.
• Medical expenses for up to 5 years. Innocent victims can currently recover treatment expenses for the rest of their lives.
• Termination of wage and medical benefits after five years where whole person impairment (WPI) is 10% or less – comprising about 90% of accident victims. Examples of injuries with WPI of 10% or less include: a surgically fused ankle; a moderate traumatic brain injury; and complex limb fractures that restrict movement and cause arthritic pain. People with these types of injuries have wage losses and medical expenses extending well beyond the five year cut off.
• (For those with WPI > 10%) lifetime treatment expenses and a small lump sum for pain and suffering.
• (For those with WPI > 20%) a lump sum for 80% of their lost earnings for their working life.

Damages
People with WPI over 10% who can prove fault will be able to recover larger lump sums and 100% (rather than 80%) of their lost earnings.
Who wins, who loses?
The big winners will be drivers who cause accidents, with about 7,000 expected to be covered by the new scheme. But to fund these new benefits, the Bill will strip compensation from innocent victims.
Children
Children are the biggest losers. Victims under 16 years currently receive treatment and care for life, but under the new scheme children under 10% WPI will receive no treatment after 5 years. Meanwhile, if the driver who caused the injuries had over 10% WPI they will receive lifetime treatment expenses and a lump sum for pain and suffering.
Currently anyone 10 years and under, with WPI of 10% or less, receives compensation for the restriction in their future earning capacity, but under the new scheme they would not be able to recover lost earnings as they would not have reached working age by the 5 year mark. Meanwhile, the drivers who caused these injuries will receive compensation for future wage loss.

For more information, contact the Australian Lawyers Alliance and the NSW Bar Association.

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