Maximum weekly benefits for injured motorists will be halved and all medical benefits cut off after five years under changes to the green slip insurance scheme that the NSW government says will deliver a 15 per cent discount on premiums.
After reviewing the system, Finance and Services Minister Greg Pearce said on Wednesday the government had decided to introduce a no-fault system similar to the one in Victoria.
However, unlike the Victorian scheme, which is underwritten by the government, the NSW system will be underwritten by the private sector.
The changes will be introduced as legislation in Parliament this week.
Mr Pearce said the no-fault scheme would give injured workers quicker access to benefits by reducing long and costly legal disputes. He said significant claims take on average four years to determine.
He said maximum weekly benefits would drop from about $4000 to $2000, which is comparable to workers’ compensation entitlements. People on incomes above $100,000 would be expected to take out income protection insurance.
Only people with more than 10 per cent whole person impairment would continue to have access to lump sum payments through the courts.
The expected 15 per cent discount on annual compulsory third party insurance premiums follows a 10 per cent increase last year. This would shave a net 5 per cent off the average premium of $550.
Mr Pearce said insurance companies would no longer have access to super profits and motorists would start seeing reductions in the cost of the green slip renewals from later this year.
”At the moment the scheme is nothing more than a lawyers’ picnic,” he said.
”The scheme requires that someone is found at fault. By removing that we will be able to remove a large part of the administration cost and disputation cost that is currently bedevilling this scheme.
”That will not mean that hoons or people acting criminally or uninsured people will be covered by the scheme. We won’t be removing common law rights for those who are more seriously injured.”
Michael Tidball, chief executive of the Law Society NSW, said the changes were ”bad news” for NSW motorists and their families.
He said the new no-fault scheme would result in a larger number of people claiming on the scheme and substantial cuts in benefits.
Negligent motorists will now be able to apply for claims, which will significantly raise their number. ”The effect of this on injured motorists and their families will mean they end up on the Centrelink queue by virtue of these changes,” Mr Tidball said.
Opposition Leader John Robertson said there were no winners as a result of the government’s changes because they would reduce benefits and not deliver a significant reduction in the premiums.
”NSW motorists are still going to be paying some of the highest premiums for green slips in the country,” he said.
”This is a government who is best friends with the insurance companies. [It] increased premiums last year by 15 per cent and has given them a massive windfall on the back of that.
”Now he [Greg Pearce] says he will bring premiums back to somewhere where they were last year, but in doing so he is also cutting benefits to people and weekly payments will be halved as a result of these changes.
”The first thing the government should be doing is bringing the insurance companies in and holding them to account, getting them to open up the books and see the profits they are making on the back of green slips.”
This story Administrator ready to work first appeared on Nanjing Night Net.