Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023

The Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023 is the collection and enforcement part of the levy framework connected to the AFCA scheme. Its own simplified outline says it is about collecting levy imposed by the related Financial Services Compensation Scheme of Last Resort Levy Act 2023.

That means this Act is not mainly about how a financial business must serve customers. Instead, it sets up the machinery for collecting levy. It deals with pre-imposition information requests, statutory estimates and revised estimates, payment notices, due dates, late payment penalty, default notices, shortfall penalty, waiver powers, recovery, substantiation notices and review rights.

For a business owner or compliance lead, this is an administrative law with real financial consequences. If your entity is within the levy framework, this Act tells you when ASIC can ask for information, how long you have to respond, when levy becomes payable, what happens if information is missing or unsatisfactory, and what can happen if inaccurate information leads to an underpayment.

The Act repeatedly refers to persons on whom levy may be imposed, but it does not fully restate all of those categories in the text available here. Key definitions such as levy, levy period, first levy period, qualifying period and sub-sector are tied to the related Levy Act. Other important concepts, including AFCA, AFCA scheme, CSLR operator and accumulation recovery day, are picked up from the Corporations Act 2001.

So a business should not assume the law applies simply because it operates in finance generally. The correct question is whether the entity falls within the levy-paying framework under the related legislation. In practice, the businesses most likely to need this page are AFS licensees, credit licensees and other regulated firms operating in a relevant sub-sector.

The Act also makes a specific point that the meaning of person is affected by sections 26, 27, 28 and 29. Those sections deal with partnerships, unincorporated associations, RSE licensees and multiple trustees. That is important because many financial businesses do not operate through a simple single-company structure. If your business uses a trustee model, superannuation structure, partnership or association arrangement, you should confirm exactly which legal person is treated as the relevant person for levy purposes.

Section 8 is one of the most practical provisions in the Act. Before the start of a levy period, ASIC may notify a person in writing that section 8 applies to them for that levy period. Once that happens, the person must provide information to ASIC in the approved form and in the required manner.

The default deadline is 28 days after the day the person is notified. But ASIC may determine a later day by notice published on ASIC's website. If ASIC does that, the later day applies instead. The Act also says ASIC may determine the manner in which the information must be provided, again by website notice. Any website notice must state the date it was published, and any day ASIC determines must be at least 2 months after the day the notice is first published. ASIC can also set different days for different classes of persons.

The approved form can require information about the person and also information about one or more other persons on whom levy may be imposed for the levy period. That matters for corporate groups, trustee arrangements and businesses with shared compliance functions. A business should not assume it only needs a narrow set of internal figures. The form may require broader information relevant to levy calculation.

The Act also notes that information provided under section 8 in the approved form is taken, for the purposes of the Corporations Act 2001, not to be a document lodged with ASIC. Even so, it is still formal regulatory information and should be prepared with care.

Sections 9 to 12 set up the estimation framework behind the levy. These provisions are technical, but they matter because they explain that levy amounts are tied to a statutory process rather than informal forecasting.

For the second levy period and later levy periods, the CSLR operator may determine an initial estimate for a levy period and sub-sector. The estimate can include compensation the CSLR operator reasonably believes will be payable, having regard to actuarial principles, AFCA unpaid fees expected for the months in the levy period, the CSLR operator's expected administrative costs, ASIC's expected administrative costs notified to the CSLR operator, capital reserve-related amounts, and reconciliations for earlier shortfalls or excesses. The Act also prevents the same shortfall or excess from being counted more than once.

The CSLR operator may later determine a revised estimate after recalculating the relevant amounts. A revised estimate may specify whether further levy needs to be imposed under the related Levy Act for the levy period and sub-sector. Depending on what the revised estimate says, the determination may need to be made as a legislative instrument.

Sections 11 and 12 separately deal with the first levy period and pre-CSLR complaints, including unpaid claims and AFCA's unpaid fees for complaints given to AFCA before the accumulation recovery day. The Act makes clear that some compensation or fees may become payable or unpaid after the end of the first levy period but still form part of that estimate for the first levy period.

For businesses, the practical point is that levy outcomes can change through statutory recalculation and reconciliation. A levy notice should be treated as part of an ongoing statutory cycle, not just a one-off invoice.

Section 13 explains when levy is due for payment. For levy imposed by section 10 of the related Levy Act for the first levy period, the amount is payable in 2 equal instalments. Each instalment is due on a business day specified in an ASIC notice, and that day cannot be before the 30th day after the notice is given. The first instalment must fall in the first levy period and the second in the second levy period. The Act notes that the second instalment notice may be given in the first levy period, and the person may choose to pay early rather than wait until the second instalment is due.

For annual levy, further levy and special levy imposed for the second levy period or a later levy period, the levy is payable in a single instalment on a business day specified in ASIC's notice, again not before the 30th day after the notice is given. If further levy or special levy is later imposed for the same levy period, ASIC will give a further notice.

The Act also allows a person to nominate another person by written notice to ASIC. If that happens, ASIC's notice may be given to the nominated person, and the payment obligation may be discharged by that nominated person. This can help where a group treasury function, service company or external adviser handles payments. But the Act is explicit that the nomination does not otherwise affect the original person's liability to pay levy.

Section 14 deals with late payment penalty. If an instalment of levy remains unpaid at the start of a levy month after it became due, the person is liable to pay a penalty for that levy month. The penalty is worked out under the statutory formula in the Act. It is due and payable at the end of the levy month, unless ASIC specifies a later day by written notice. The practical message is simple: once a due date is missed, additional cost can continue to accrue by levy month.

Section 15 gives ASIC a default assessment tool. ASIC may give a person a notice stating the amount that, in ASIC's opinion, is an instalment of levy payable for a levy period if the person fails to provide required section 8 information, ASIC is not satisfied with the information provided, or the person fails to comply with a substantiation requirement under section 20. The amount stated in the notice is taken to be the instalment payable unless the contrary is proved. In practice, weak reporting can move the business from self-reported figures to an ASIC-stated amount.

Section 16 deals with shortfall penalty. It applies where a person makes a statement to ASIC in information provided under section 8, the statement is false or misleading in a material particular, the levy paid was worked out on that basis, and the paid amount is less than the amount actually payable. If those elements are met, the person is liable to pay a penalty equal to twice the amount of the shortfall, unless the person took reasonable steps to ensure the statement was correct. Shortfall penalty is payable on the business day specified in ASIC's notice, which cannot be before the 30th day after the notice is given, unless ASIC later specifies a later day.

For businesses, this means levy reporting should be treated like a controlled regulatory return. Accuracy, review and documented sign-off matter.

The Act's table of contents shows a dedicated substantiation regime in sections 20 to 22. Section 8 itself also warns that information given to ASIC may need to be substantiated. Although the full text of those sections is not reproduced here, the structure of the Act makes the practical expectation clear: if your business gives figures to ASIC for levy purposes, you should be able to explain and support them.

This is especially important because failure to comply with a substantiation requirement can feed directly into ASIC's power to issue a default notice under section 15. In other words, record-keeping is not just good housekeeping. It can affect the amount treated as payable.

For startups and smaller regulated firms, the common problem is fragmented data. Relevant information may sit across finance systems, complaints records, licensing files, trustee records, board papers and outsourced compliance documents. If the approved form asks for information about related persons as well as the reporting entity, the business may need a coordinated internal process to gather and verify the data.

Section 18 confirms that ASIC may, on behalf of the Commonwealth, waive payment of the whole or part of an instalment of levy, late payment penalty or shortfall penalty if ASIC is satisfied there are exceptional circumstances justifying the waiver. The available text also shows ASIC may do this on its own initiative or on written application. Because the extract cuts off during section 18, businesses should check the full current Act for the detailed process and any conditions before relying on waiver mechanics.

The Act also contains provisions on recovery, internal review of certain decisions and Administrative Review Tribunal review of certain decisions. Those pathways matter where a business disputes an ASIC decision or needs to understand what can be challenged and how.

Finally, the Act specifically includes sections dealing with the treatment of partnerships, unincorporated associations, RSE licensees and multiple trustees. That is a strong signal that entity structure is not a side issue. If your business operates through one of these arrangements, you should verify exactly how the Act applies to your structure before assuming who must report, who receives notices and who is liable.

The Act commenced at the same time as the related Financial Services Compensation Scheme of Last Resort Levy Act 2023. The commencement table in the Act records that this was 4 July 2023 for the Act as originally enacted. The current compilation referred to here is dated 21 February 2025 and includes amendments up to Act No. 14 of 2025.

Before relying on this page, a business should check four things. First, whether it is actually a levy payer under the related Levy Act. Second, which levy period and sub-sector are relevant. Third, whether ASIC has published any website notice setting the day or manner for section 8 information. Fourth, whether the business structure involves a partnership, unincorporated association, RSE licensee or multiple trustees, because those arrangements are specifically addressed by the Act.

If there is any uncertainty about the correct entity, the information required in the approved form, or the effect of a default notice or penalty notice, the issue should be escalated quickly. This Act is procedural, but the costs of getting the procedure wrong can still be significant.