GST Letter Information
CHANGES TO COMPULSORY THIRD PARTY (CTP) INSURANCE PREMIUMS
From 1 July 2003, changes were made to the premium rating structure for Compulsory
Third Party (CTP) insurance in response to the expiry of GST transitional arrangements
applying to CTP.
More than One (Dual) Premiums Available
These changes introduced dual premiums by applying a loading to each vehicle class
premium where the vehicle owner, or the person who paid the premium, is entitled
to claim the GST paid on the premium as an Input Tax Credit (ITC) from the Australian
Tax Office (ATO).
How we use the Premium Paid?
We use the premium you have paid to determine whether or not we are entitled to
claim refunds from the Tax Office at the time a claim is made. Out-of-date or incorrect
information can result in unexpected increases in claims costs, which would then
lead to further increases in premiums.
How do we ensure our Records are Correct?
Given the potential impact of choosing the incorrect premium, we:
- send updated information with the renewal on the two premiums and how the premium
offered has been calculated
- rely upon the registered owner to check that their registration has the correct
disclosure every renewal, and if it is incorrect, to advise Queensland Transport
of any change required
- review our records using information such as vehicle class, registered name and
vehicle usage to identify records where the registration may not have been correctly
noted
- contact our customers direct for confirmation where the premium paid does not match
the information sent to us by Queensland Transport.
How does the registration usage differ to the Input Tax Credit Entitlement?
Queensland Transport requires you to advise the main use of your vehicle. Examples
of usage include private, business, dealer, and taxi. This information is used by
Queensland Transport to determine the registration fee payable.
The CTP premium is calculated based on the term, class of vehicle, and whether or
not you are entitled to claim an Input Tax Credit for the GST on the insurance component.
While there is a correlation between the usage used by Queensland Transport and
whether you are entitled to claim an Input Tax Credit, there are instances where
this will not be the case.
Insurers are required by law to offer premiums based on whether or not you are entitled
to an Input Tax Credit and it is important that we obtain the correct information.
Does an incorrect ITC entitlement affect my CTP Policy Coverage?
No, the cover extended for a CTP policy under Government legislation is not affected
by the Input Tax Credit entitlement. We may, however, request that the additional
premium be paid prior to paying the claim.
CTP
What is CTP Insurance?
CTP Insurance covers vehicle owners and drivers for personal injury claims made
against them by other drivers, passengers (in your car and other vehicles), pedestrians,
cyclists and motorcyclists. It operates anywhere in Australia.
Why do I have to have CTP insurance?
Thousands of people are involved in motor accidents every year. If injured, they'll
need medical attention and often rehabilitation. If someone cannot work as a result
of the accident, they may even need money to live on. CTP insurance was made compulsory
to protect these people who are injured through no fault of their own, and to protect
the individuals from having to pay the cost of these claims from their personal
assets.
Does CTP insurance cover damage to my vehicle or other property?
No. CTP insurance does not cover damage to any property. To cover yourself for property
damage you will need to arrange separate insurance.
How do I know whether I have CTP insurance?
Your CTP insurance payment is included in the cost of your motor vehicle registration.
If your vehicle is registered in Queensland, you will have CTP insurance. When you
buy any Queensland registered new or used vehicle, the CTP insurance transfers to
you. If it is not registered, you are not covered by CTP insurance.
The "Compulsory Third Party Insurance Information" sheet enclosed with
your Registration Renewal Notice will show your current CTP insurer.
How do I get a new CTP policy and what information do I need to bring?
CTP can be purchased from any of our Queensland branches. You will need to provide
the year, make, model and either a VIN or engine number from the vehicle as well
as the appropriate payment.
Suncorp branches accept payment in the form of cash, cheque, Visa card or Mastercard.
Please note that if the vehicle is unregistered at the time of purchasing a new
CTP policy, the cover to the vehicle will be limited (see below FAQ "Will purchasing
a CTP policy cover me if the vehicle is not registered?).
Can I buy CTP for someone else?
Yes, you can purchase CTP for another person. However, you will need a letter authorising
you to act on their behalf before Queensland Transport will register the vehicle.
Will purchasing a CTP policy cover me if the vehicle is not registered?
Yes, for restricted use only. If you purchase a CTP certificate, you can drive the
vehicle directly to the nearest Safety Certificate Inspection (Roadworthy) station
and directly on to Queensland Transport to register the vehicle. You must carry
the CTP certificate and a completed Application for Registration in the vehicle
with you. No other road use is permitted before the vehicle is registered.
Can I change my CTP insurer?
Yes. You can nominate a change of insurer at any time but the change will only come
into effect from the due date for registration renewal.
How are Premiums Calculated?
The price of CTP is regulated by the Motor Accident Insurance Commission (MAIC).
Each quarter, MAIC set a floor and a ceiling price for each vehicle class. Insurers
are then required to submit the price they will charge. The price cannot be lower
than the floor price or higher than the ceiling price. These prices remain fixed
for the quarter.
Are Premium Discounts Available?
Legislation prevents CTP prices from being discounted. However, having your CTP
with Suncorp may entitle you to discounts on your other personal insurances such as motor
and home.
GST Changes
What has changed?
Effective from 1 July 2003 two premiums apply to each class of vehicle. One for
people who are not registered for GST (or who are unable to claim the GST component
as an input tax credit) and one for GST registered tax entities who are entitled
to claim an Input Tax Credit.
Why do I have a higher premium if I am entitled to an Input Tax Credit (ITC)?
As a result of changes to the GST legislation, the cost of settling a claim is higher
where the owner is entitled to claim an ITC. The Queensland Government has determined
that there will be no cross subsidy between owners who do not have an entitlement,
and those that do. As a result, the ITC entitlement premium is higher than the "no
ITC" entitlement premium.
In most cases, when you claim your ITC on your CTP insurance premium, the net premium
(premium paid less ITC claimed) will actually be less than the "no ITC" premium.
This is because the percentage able to be claimed back is more than the difference
between the two premiums.
New CTP Insurance Policies
To ensure that we offer the correct premium, new customers will be asked a tax status
question when purchasing a CTP Insurance policy. This question helps determine the
correct premium to be paid.
Registration Renewals
Your registration renewal premium will be offered on the basis of the previous information
that has been provided. As these details can change during the year it is important
that you take the time to read the brochure sent to you, and your registration renewal,
before you pay your registration renewal. If any of the information is incorrect,
please contact Queensland Transport (Tel 13 23 80).
If you are uncertain of your GST status or entitlement to claim an ITC, please discuss
with your accountant, financial adviser or tax agent.
Product Disclosure Statement
CTP, Driver Protection Cover and Motor Vehicle and Boat insurance are issued by Suncorp Metway Insurance Ltd ABN 83 075 695 966. For Motor Vehicle and Boat insurance, please read the relevant Product Disclosure Statement; for Driver Protection Cover please read the policy document (pdf, 111KB) before you make any decisions regarding any of these products. Contact us for a copy.
