Australian CTP Scheme administrators are seeking stricter punishments for fraudulent and misleading conduct, with a recent NSW prosecution resulting in a 16-month prison sentence. The decision highlights a broader shift towards stronger enforcement and a clear deterrent for fraudulent claimants.
Compulsory Third Party (CTP) schemes are present in every State and Territory across Australia, providing compensation for personal injury arising from motor vehicle accidents. Some have no-fault compensation as well as fault-based schemes.
In recent years, these schemes have seen an increase in fraudulent claims. Examples include providing fake pay slips, fabricated tax returns, and falsified medical records alleging incapacity. Each jurisdiction has provisions under its CTP scheme or criminal law making it an offence to provide false and misleading information, which can result not only in monetary penalties but, in some cases, imprisonment. Authorities administering CTP schemes have become more vigilant in identifying cases involving fraud and misleading statements, and encourage reporting to deter such conduct.
New South Wales
The State Insurance Regulatory Authority (SIRA) in New South Wales (NSW) recently secured its first prison sentence for a fraudulent claim made under the NSW CTP scheme. The claimant, NA, who produced 12 counterfeit documents, including pay slips claiming lost income due to his injury, was sentenced to 16 months’ imprisonment with a non-parole period of 5 months.
NA relied on these fraudulent documents to support his claim that he suffered a loss of earnings following a motor vehicle accident. As a result, he fraudulently received weekly CTP payments. In addition to the sentence, NA was ordered to pay $12,786.62 to GIO and $5,896 to SIRA for its professional costs.
The claimant’s partner, SV, was a passenger in the vehicle and was also found guilty of fraud, receiving a 12-month community correction order. SV was further ordered to repay $37,246 to GIO for weekly benefits and $6,747 for professional costs to SIRA. SV falsely claimed statutory benefits despite not suffering a loss of earnings as a result of the accident. She was found to have fabricated her pay slips and made false declarations in certificates of fitness to obtain weekly payments.
Since 2024, SIRA has prosecuted multiple claims involving fraud under the CTP scheme, including a 12-month intensive correction order for falsely claiming $55,698.06 in benefits, and a community correction order for false representations of incapacity to work, along with monetary penalties.
In its prosecutions, SIRA has relied on section 6.40(c) of the Motor Accident Injuries Act 2017 (NSW), which provides that a person who makes a false or misleading statement, including by furnishing information concerning a motor accident, may face imprisonment for two years.
States and territories administering CTP schemes have similar statutory provisions that make it an offence to provide false and misleading information, which can result in heavy fines and imprisonment.
Victoria
The Transport Accidents Act 1986 (Vic) provides that a person who attempts to obtain any fraudulent benefit under the CTP scheme can face imprisonment for two years. Similarly, a person who provides false or misleading information in relation to a claim can face imprisonment for one month.
The Transport Accident Commission (TAC), the CTP administering body in Victoria, has also begun a crackdown on fraudulent and misleading CTP claims. TAC has recently prosecuted the following claims:
- A claimant who suffered injuries in a motor vehicle crash but returned to work without advising TAC and continued to receive statutory benefits, was sentenced to 120 hours of community service with a conviction recorded against him.
- A claimant who fraudulently obtained benefits by providing TAC with false and misleading information by filing false certificates was sentenced to a 12-month community correction order with conviction, and ordered to repay $56,978.
Queensland
The Motor Accident Insurance Act 1994 (Qld) provides that a person who attempts to defraud, or deliberately mislead the administering Commission, can face imprisonment for up to 18 months. Similarly, a person who provides false or misleading information about a motor accidents claim can face imprisonment for up to one year.
South Australia
The Motor Vehicles Act 1959 (SA) provides that a person who provides notice or information that is false or misleading in relation to a claim can face penalty of $50,000 or imprisonment for one year.
Western Australia
The Motor Vehicle Third Party Insurance Act 1943 (WA) provides that a person who provides false or misleading information in relation to a claim can receive a penalty of $10,000 and a criminal conviction.
The Insurance Commission of Western Australia has also prosecuted claimants who provided false and misleading information in an attempt to secure financial reward from their motor injury insurance.
Other States and Territories
Tasmania, the Australian Capital Territory and the Northern Territory do not have specific provisions in the statutes governing their respective CTP schemes specifying penalties or imprisonment for fraudulent or misleading conduct. However, these states and territories can rely on their respective criminal codes to prosecute similar fraudulent and misleading claims.
What this means for you
These prosecutions suggest that a similar crackdown can occur across Australian CTP schemes, including seeking stricter punishments for individuals making fraudulent and misleading CTP claims.
For insurers, cooperation with prosecuting authorities is key to preventing fraud. The deterrent effect of successful prosecutions can help better manage CTP schemes and support genuine claims.
For claimants, this is likely to lead to increased scrutiny of evidence such as financial records and medical documents to identify fraudulent or misleading activity. This helps ensure that only genuine claims benefit from the schemes. Claimants can also expect increased regulatory action, including prosecutions, penalty notices and recoveries.
Fraudulent claims increase the burden on these schemes, ultimately costing more in CTP premiums. More proactive investigations by insurers, leading to successful prosecutions, help protect CTP schemes.
If you are an insurer facing fraudulent and misleading claims, BN’s national team of CTP experts can help.
