Introducing the no-fault National Injury Insurance Scheme (NIIS) across state boundaries would result in significant costs for Queensland and WA, according to a new report.

One proposal assessed in the report on the NIIS and motor vehicle accidents estimates the total extra cost to governments over 10 years would be $831 million for Queensland and $525.7 million for WA, and $130.3 million for the NT.

This option would require “significant change in Queensland and WA as they move from fault‑based systems to no-fault systems for the lifetime care and support of individuals with catastrophic injuries”, the report by PricewaterhouseCoopers (PWC) for Treasury says.

Catastrophic injury claims would be managed through social support instead of court processes, lowering legal costs and cases.

There would be no lump-sum compensation, with costs paid over claimants’ lifetimes.

All schemes would be funded through compulsory third party charges, with no reliance on the national disability insurance scheme.

The NIIS would complement the disability insurance scheme, providing lifetime care and support to people with catastrophic injuries from motor vehicle, workplace, medical treatment or general accidents.

More than 20,000 people have such injuries in Australia, with up to 1000 new claimants a year. The Productivity Commission estimates the average cost of lifetime care at $1-$2 million.

“Individuals in some jurisdictions will see an increase in their premiums when the NIIS is introduced,” the report says. More people would be eligible to claim under the system, including those at fault and those unable to prove fault.

In a submission, the Insurance Council of Australia suggests five possible NIIS insurance models, including private sector or government underwriting and a two-tier system for catastrophic and other injuries – similar to the NSW motor vehicle accident scheme.

PWC says providing insurance for catastrophic injury can be capital-intensive. Private insurers may not want to underwrite such a scheme, but could provide services such as claims management. 

The deadline for submissions to the Treasury consultation is May 23.