Financial Services Compensation Scheme of Last Resort Levy (Collection) (Initial Cost Estimates for 2024-25 Levy Period) Determination 2024

The Financial Services Compensation Scheme of Last Resort Levy (Collection) (Initial Cost Estimates for 2024-25 Levy Period) Determination 2024 is a Commonwealth legislative instrument made under the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023. It was made by Compensation Scheme of Last Resort Limited, identified in the instrument as the operator of the financial services compensation scheme of last resort.

Its function is specific. It sets the initial estimates of claims, fees and costs for the 2024-25 levy period for four sub-sectors: credit intermediaries, credit providers, licensed personal advice and securities dealers. For business owners, the practical point is that this instrument is part of the levy collection framework. It does not stand alone as a complete statement of who pays, how much each entity pays or when payment is due.

The instrument works under subsection 9(1) of the Act. For each listed sub-sector, it states a determined estimate for the 2024-25 levy period and then breaks that estimate into specified amounts. Each total includes an amount for paragraph 9(1)(a) of the Act and an amount for paragraph 9(1)(b) of the Act, with the paragraph 9(1)(b) amount further split into four components linked to subparagraphs of the Act.

That structure matters because it shows the instrument is doing a technical statutory job. It is setting the initial estimate for each sub-sector in the form required by the Act. It is not setting out the whole collection process. The instrument does not explain, on its face, how the sub-sector estimate is later allocated across businesses, whether any caps or thresholds apply, or what administrative steps follow for a particular entity.

For that reason, businesses should avoid two common mistakes. The first is assuming the determination itself creates the entire levy obligation. The second is assuming the sub-sector total is the amount a single business will have to pay. Neither reading is supported by the text of the instrument.

On its face, the determination applies only to four named sub-sectors: credit intermediaries, credit providers, licensed personal advice and securities dealers. The instrument also says those expressions have the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy Regulations 2023.

That cross-reference is important. A business cannot safely decide it is in or out based only on the ordinary meaning of those labels. The legal definitions sit in the regulations. In practice, that means a business should check its licence position, the activities actually carried on by the relevant entity, and whether those activities fit the technical regulatory definition of one of the listed sub-sectors.

This is especially important for groups with multiple entities, mixed service offerings or changing business models. A group may have one entity that provides advice, another that deals in securities, and another that performs credit activities. The right question is not what the group calls itself commercially. The right question is which legal entity carries on which regulated activity and whether that entity falls within a listed sub-sector under the regulations.

Businesses usually outside the immediate scope of this determination are those that do not fall within one of the four listed sub-sectors. Even then, caution is sensible. A related entity in the same group may still be caught, and a business model that has evolved over time may no longer fit old assumptions.

The instrument defines the 2024-25 levy period as the 12-month period starting after the end of the first levy period. It also notes that the 2024-25 levy period is the second levy period.

For the credit intermediaries sub-sector, the determined estimate is $1,799,985.77. That total is made up of $359,721.54 for paragraph 9(1)(a) of the Act and $1,440,264.23 for paragraph 9(1)(b), comprising $126,498.55, $535,952.51, $361,146.50 and $416,666.67 for the listed subparagraph components.

For the credit providers sub-sector, the determined estimate is $1,497,768.71. That total is made up of $14,752.20 for paragraph 9(1)(a) and $1,483,016.51 for paragraph 9(1)(b), comprising $162,323.36, $542,879.98, $361,146.50 and $416,666.67.

For the licensed personal advice sub-sector, the determined estimate is $18,562,058.57. That total is made up of $11,377,857.89 for paragraph 9(1)(a) and $7,184,200.68 for paragraph 9(1)(b), comprising $1,978,098.65, $4,428,288.86, $361,146.50 and $416,666.67.

For the securities dealers sub-sector, the determined estimate is $2,287,886.73. That total is made up of $759,445.28 for paragraph 9(1)(a) and $1,528,441.45 for paragraph 9(1)(b), comprising $193,006.55, $557,621.73, $361,146.50 and $416,666.67.

The instrument also includes an important note that no amounts have been included in relation to subparagraph 9(1)(b)(v) and paragraph 9(2)(c) of the Act because those provisions do not apply until the fourth or later levy periods. For businesses, that is a reminder that the framework can operate differently across levy periods and that later periods may involve additional elements not included here.

The figures in this determination are sub-sector estimates, not entity-specific invoices. That distinction is central. A business should read the numbers as showing the estimated cost pool set for the relevant sub-sector for the levy period, using the statutory categories in the Act.

For example, the licensed personal advice sub-sector has a much larger estimate than the other listed sub-sectors. That is commercially significant because it signals that businesses in that sub-sector should be especially alert to levy exposure, budgeting and governance. But the instrument does not say that every advice business will pay the same amount, or that any one business will pay the full estimate. The later collection outcome for a particular entity depends on the broader legal framework.

Likewise, a lower estimate for another sub-sector should not be read as meaning there is no practical impact. Even a smaller sub-sector estimate can affect budgeting, reserves, pricing and working capital. The safer approach is to treat the determination as a prompt to check the collection rules and prepare for possible levy-related costs.

For many businesses, this instrument becomes relevant at ordinary operational moments rather than only in legal reviews. Annual budgeting is an obvious trigger point. If your entity is in one of the listed sub-sectors, levy-related costs should be considered as part of the financial plan for the relevant period.

Board and management reporting is another trigger point. Directors and senior managers should understand whether the business sits in a listed sub-sector, what the sub-sector estimate is, and whether the business has a process for monitoring later collection steps. This is particularly important where the business operates in licensed personal advice, given the size of the estimate in that sub-sector.

Other practical trigger points include licence applications or variations, acquisitions of regulated businesses, internal restructures, and changes to service lines. A business that starts offering personal advice, expands into securities dealing, or changes the entity that carries on regulated activities may need to revisit its sub-sector classification and levy planning.

Startups and technology-led businesses should also be careful. A business may think of itself as a platform or software provider, but if a licensed entity in the group is carrying on regulated advice, dealing or credit activities, the levy framework may still be relevant.

If your business may be affected, the most useful first step is to gather the documents that show what each entity is authorised to do and what it actually does in practice. That usually includes licence details, authorisations, group structure charts, internal descriptions of services, finance forecasts and any prior regulatory correspondence relevant to levy issues.

These records help with two separate tasks. First, they help confirm whether the right entity has been placed in the right sub-sector. Second, they help the business budget and govern any levy-related exposure. In many organisations, finance teams focus on cost while compliance teams focus on classification and notices. Both functions matter here, and directors should know who is responsible for monitoring the issue.

Good conduct in practice is straightforward. Identify the entity, confirm the sub-sector using the regulations, monitor official developments under the levy framework, and keep a clear internal record of the basis for your classification and budgeting decisions.

The instrument is in force. It is dated 14 March 2024 and the public register entry shows registration on 18 March 2024. Under the commencement clause, the whole instrument commences on the day after registration.

The instrument applies to the 2024-25 levy period, which it defines as the 12-month period starting after the end of the first levy period. It also notes that this is the second levy period. If your business needs exact accounting treatment or period mapping, that should be checked against the principal legislation and your own reporting framework.

The public register metadata also indicates a possible future repeal date of 1 April 2034 under section 50 of the Legislation Act 2003. For most businesses, the immediate operational focus should remain on the fact that the instrument is currently in force and forms part of the active levy framework.

This page explains the determination in practical terms, but businesses should still verify a few points before acting on it. First, confirm whether your entity is actually in one of the four listed sub-sectors under the regulations. Second, check the principal Act and regulations for the rules that turn these estimates into collection outcomes. Third, make sure you are looking at the correct legal entity, not just the trading brand or group name.

It is also sensible to check whether any later official notices, guidance or administrative steps affect your entity for the relevant levy period. If your business model is mixed, unusual or spread across several entities, a tailored legal or compliance review may be needed before you rely on a simple classification assumption.