What Is a Threshold Injury in a CTP Claim in NSW?

If you have been injured in a motor vehicle accident in New South Wales, the classification of your injury as either “threshold” or “non-threshold” will shape almost every part of your CTP claim. It decides how long your statutory benefits continue, whether you can pursue a common law damages claim, and whether ongoing treatment funding remains available after the first year. This guide explains what threshold and non-threshold injuries mean under the Motor Accident Injuries Act 2017 (NSW), how the classification is made, and the practical impact on your personal injury benefits and any lump sum entitlements.

Threshold Injuries Under the Motor Accident Injuries Act 2017

The term “threshold injury” is defined in section 1.6 of the Motor Accident Injuries Act 2017 (NSW). Before 1 April 2023, these injuries were called “minor injuries”, but the terminology changed with the Motor Accident Injuries Amendment Act 2022 to reflect that many of these injuries are far from minor in daily life, even where they meet the technical definition. Non-minor injuries were also known as non-threshold injuries.

Under section 1.6 of the Act, a threshold injury is one or both of:

• a soft tissue injury; or
• a psychological or psychiatric injury that is not a recognised psychiatric illness.

SIRA’s position is that most people classified with a threshold injury recover within 52 weeks of the accident. The label is a legal category based on the type of injury sustained.

What Counts as a Soft Tissue Injury

Section 1.6(2) of the Act defines a soft tissue injury as an injury to the tissue that connects, supports or surrounds other structures or organs of the body. That includes muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes. The definition excludes:

• injuries to nerves; and
• complete or partial rupture of tendons, ligaments, menisci or cartilage.

Whiplash is the most common threshold soft tissue injury after a car accident. Muscle strains, minor sprains, and soft-tissue bruising usually fall into the same category.

Threshold Psychological or Psychiatric Injuries

A psychological or psychiatric injury is a threshold injury when it is not a recognised psychiatric illness. Feelings of sadness, anxiety, fear, anger or guilt following a crash generally sit in this category. On SIRA’s own guidance, adjustment disorder and acute stress disorder are examples of threshold psychological or psychiatric injuries. Post-traumatic stress disorder, major depressive disorder and other diagnosed psychiatric conditions are treated differently, as covered below.

Non-Threshold Injuries: What Falls Outside the Threshold Definition

A non-threshold injury is any injury caused by the motor accident that does not meet the threshold definition. These are the injuries the scheme treats as more serious, with longer benefits and access to a common law damages claim where fault can be established.

Physical Non-Threshold Injuries

Physical injuries that are not threshold injuries include:

• fractures of any bone;
• nerve injuries and nerve damage;
• complete or partial rupture of a tendon, cartilage, meniscus or ligament; and
• damage to a spinal nerve root that meets the criteria for radiculopathy.

Fractures fall outside the threshold regardless of how they heal. A hairline fracture in a rib and a complex fracture requiring surgery are both non-threshold injuries.

Recognised Psychiatric Illnesses

A recognised psychiatric illness is a non-threshold psychological injury. Common examples include post-traumatic stress disorder and major depressive disorder, diagnosed by a psychiatrist against recognised diagnostic criteria. Acute stress disorder and adjustment disorder are legally classified as threshold injuries.

Where symptoms are severe, ongoing or affecting your ability to work, a diagnosis from a psychiatrist can change your injury classification and your entitlements. Psychological injuries are often under-diagnosed early in a claim, so raising them with your treating doctors matters.

The Radiculopathy Test for Spinal Nerve Root Injuries

Spinal injuries sit at the sharp edge of the threshold definition. Clause 4(1) of the Motor Accident Injuries Regulation 2017 (NSW) states that an injury to a spinal nerve root that manifests in neurological signs is still a soft tissue injury, unless those signs meet the definition of radiculopathy.

Under clause 5.8 of Part 5 of the Motor Accident Guidelines, radiculopathy requires at least two of the following five clinical signs, assessed in accordance with Part 6 of the Guidelines:

• loss or asymmetry of reflexes;
• positive sciatic nerve root tension signs;
• muscle atrophy or decreased limb circumference;
• muscle weakness anatomically localised to a spinal nerve root distribution; and
• reproducible sensory loss anatomically localised to a spinal nerve root distribution.

If only one of the five signs is present, the spinal injury is treated as a threshold injury, even where imaging shows a disc bulge or other pathology. The distinction can turn on a careful physical examination and the quality of the medical evidence supporting it.

Why the Classification Affects Your CTP Claim

The threshold injury decision drives three practical outcomes in a NSW CTP claim: how long your statutory benefits continue, whether you can pursue a common law damages claim, and whether you can claim non-economic loss for pain and suffering.

Impact on Statutory Benefits

Statutory benefits are the “no-fault” personal injury benefits payable through the CTP insurer of the at-fault vehicle. They cover income support payments, medical expenses, and care expenses. For a general overview of the scheme, see our guide to CTP insurance claims in NSW.

For the first 52 weeks after the accident, most injured people receive statutory benefits regardless of fault. Weekly income support is generally paid at up to 95% of pre-accident weekly earnings for the first 13 weeks under sections 3.6 and 3.7 of the Act. From week 14 to week 52, the rate drops to up to 85% for a partial loss of earning capacity, or 80% for a total loss of earning capacity, subject to the statutory cap.

The difference between threshold and non-threshold injuries appears after 52 weeks. If your injuries are threshold injuries, or if you were wholly or mostly at fault for the accident, your statutory benefits generally stop at that point. Where your injuries are non-threshold, and you were not wholly or mostly at fault, income support can continue for up to 156 weeks. This extends to up to 260 weeks if your permanent impairment is greater than 10% and you have a pending damages claim. Treatment and care can continue for longer where reasonable and necessary. For someone whose recovery takes more than a year, that outcome matters.

Impact on a Common Law Damages Claim

A common-law damages claim is a lump-sum claim for the long-term costs of a serious injury. A lump-sum compensation claim covers past and future economic losses (lost wages and future lost earnings) and non-economic losses (pain and suffering) where the impairment threshold is met.

Under the Motor Accident Injuries Act 2017, common law damages are not payable for a threshold injury. If the only injuries you sustained in the accident are threshold injuries, a lump sum claim is not available, no matter how much significant pain the injury is causing you day to day.

A common-law claim also requires that another party be at fault. If you were wholly or mostly at fault for the accident, you cannot pursue damages even where your injuries are non-threshold. Contributory negligence can also reduce a lump sum payout where you are found partly at fault.

Non-Economic Loss and the 10% Whole Person Impairment Threshold

Even with a non-threshold injury, non-economic loss (pain and suffering) is only available where your degree of permanent impairment is greater than 10% whole person impairment. Physical and psychiatric injuries are assessed separately under the Motor Accident Guidelines. The two impairments cannot be combined to reach the 10% threshold.

Past and future economic loss can be claimed without reaching the 10% impairment threshold, provided your injuries are non-threshold, and another party was at fault. Non-economic loss is capped by the legislation, with the cap adjusted annually.

How the Insurer Makes a Threshold Injury Decision

The CTP insurer must make a threshold injury decision within three months of your claim being lodged. The insurer’s decision is based on the medical evidence available at that point: your diagnosis, reports from your treating doctor, imaging, and any independent medical assessment the insurer arranges.

Under Part 5 of the Motor Accident Guidelines, the assessment process must consider:

• an accurate history, including any pre-existing condition;
• a review of your relevant medical records;
• a description of your current symptoms and injury severity;
• a thorough physical and, where relevant, psychological examination; and
• diagnostic tests available at the assessment.

Insurers are not permitted to require you to undergo diagnostic imaging solely for the purpose of making a threshold injury decision.

Early, accurate medical evidence carries real weight. Making sure your treating doctors document every injury sustained, clearly note any pre-existing conditions, and record objective findings on examination supports a fair classification. Where psychological injuries are present, a formal psychiatric review is often the difference between a threshold and non-threshold outcome.

Disputing a Threshold Injury Classification

If you disagree with the insurer’s decision on your injury classification, you can challenge it. This is often worth doing where the medical picture is borderline: a spinal injury where signs of radiculopathy are emerging, a psychological injury that has not been formally diagnosed by a psychiatrist, or a nerve injury the insurer has treated as soft tissue.

Insurer Internal Review

The first step is an insurer internal review. You have 28 days from the insurer’s decision to lodge an internal review request with the same insurance company. A different decision-maker within the insurer reconsiders the file. Internal review is a formal process, but it is quicker than commission proceedings and can resolve clear errors.

Personal Injury Commission

If internal review does not resolve the dispute, the matter can be referred to the Personal Injury Commission for medical assessment. The Personal Injury Commission is an independent body that resolves motor accident and workers’ compensation disputes in New South Wales. A medical assessor examines the evidence and makes a binding determination on whether your injury meets the threshold definition.

Applications to the Commission for a threshold injury dispute must generally be made within 28 days of the internal review decision. The window is short, and the medical evidence presented at the medical assessment often decides the outcome.

Time Limits That Apply to Your Claim

The NSW CTP scheme has strict deadlines. Missing them can reduce your entitlements or bar your claim entirely.

Lodge an Application for Personal Injury Benefits (the claim form) within 28 days of the accident date for weekly income support to be fully backdated. The outer limit for the initial claim is three months.

The 20-month waiting period for lodging a damages claim was removed on 1 April 2023. A common law claim can now be lodged once the injury has stabilised and the classification is settled. The general limitation period for a motor accident damages claim in NSW is three years from the accident date. Different rules apply to children, people under a legal incapacity, and claims involving unidentified or uninsured vehicles handled through the Nominal Defendant.

How Burke Mead Lawyers Can Help

An incorrect threshold injury classification can cost you months or years of income support payments and rule out a lump sum damages claim entirely. Getting the classification right, and challenging it when it is wrong, is one of the most valuable points in an NSW CTP claim, and having proper legal advice is essential.

Emma Mead is the Managing Principal of Burke Mead Lawyers, a Law Society of NSW Accredited Specialist in Personal Injury Law, a Nationally Accredited Mediator, and a Doyle’s Guide recognised practitioner. Our team acts for injured people across Newcastle, the Hunter, the Central Coast, Sydney, and regional NSW.

If your injury has been classified as threshold and you do not agree, or if you want a clear view of your entitlements before dealing with the insurance company, contact Burke Mead Lawyers for trusted advice.

Key Takeaways

• Under the Motor Accident Injuries Act 2017 (NSW), a threshold injury is a soft tissue injury or a psychological or psychiatric injury that is not a recognised psychiatric illness.
• Non-threshold injuries include fractures, nerve injuries, complete or partial rupture of tendons, ligaments, menisci or cartilage, radiculopathy, and recognised psychiatric illnesses such as post-traumatic stress disorder or major depressive disorder.
• A spinal nerve root injury is a threshold injury unless at least two of the five clinical signs of radiculopathy are present on examination.
• The threshold classification decides whether your statutory benefits continue beyond 52 weeks and whether you can pursue a common law damages claim.
• Non-economic loss (pain and suffering) is only available where your permanent impairment is greater than 10% whole person impairment.
• The CTP insurer must make a threshold injury decision within three months of the claim being lodged; you can challenge it through insurer internal review and the Personal Injury Commission.