​​Financial Services Compensation Scheme of Last Resort Levy (Collection) (Initial Estimate of Unpaid Claims and Fees) Determination 2024​

This legislative instrument is called the Financial Services Compensation Scheme of Last Resort Levy (Collection) (Initial Estimate of Unpaid Claims and Fees) Determination 2024. It is made under the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023 and is in force.

In practical terms, this instrument is one step in the broader Compensation Scheme of Last Resort, or CSLR, levy collection framework. It is not a general operating code for businesses. It does not set out broad conduct standards, complaint handling rules, reporting duties or a direct payment notice to each business. Its job is narrower: it determines an estimated sum for the first levy period under the parent Act.

That distinction matters. Business owners sometimes see a levy-related instrument and assume it automatically creates a new invoice or immediate payment obligation. This determination does not do that on its face. Instead, it sets an estimate that is used within the broader statutory framework. To understand whether your business actually has levy exposure, you need to read this instrument together with the parent Act and any later levy notices or related instruments that apply to your sector.

Section 5 of the instrument states that, under section 11 of the Act, for the first levy period, $240,857,800.07 has been determined as the estimated sum of three components.

First, it includes the specified amount equal to what the CSLR operator reasonably believes, having regard to actuarial principles, will be the total amount of compensation that will be payable under section 1063 of the Corporations Act 2001 and that relates to pre-CSLR complaints.

Second, it includes the specified amount equal to what the CSLR operator reasonably believes, having regard to actuarial principles, will be the portion of the total amount of AFCA's unpaid fees for all months that relates to pre-CSLR complaints.

Third, it includes the specified amount equal to AFCA's accumulated unpaid fees.

For businesses, this tells you two useful things. The first is that the amount is not an arbitrary round-number policy figure. The second is that the estimate is tied to defined categories of compensation and AFCA fee exposure, and the operator must form the estimate by reference to actuarial principles. That gives context to the role of the instrument within the levy framework, even though it still does not tell an individual business what it will owe.

The instrument itself does not list every class of business that may ultimately be affected. It relies on the parent Act for scope and definitions. That means you should be careful not to overread the instrument on its own.

As a practical guide, this determination is most relevant to businesses operating in regulated financial services and credit markets that may be within the CSLR levy collection regime. That can include Australian financial services licensees, Australian credit licensees, financial advice businesses, lending businesses and regulated fintechs. It is also commercially relevant to businesses with AFCA complaint exposure, because the estimate expressly includes AFCA unpaid fee components.

Businesses that are outside regulated financial services and credit are usually unlikely to be directly affected by this instrument. Even within regulated markets, not every business should assume it is automatically liable for a levy because this page cannot replace the parent Act's scope rules.

If you are a founder, practice manager, compliance lead or finance manager in a regulated business, the safest approach is to treat this instrument as a signal to check your status under the parent Act rather than as a complete answer on liability.

This determination is most useful when read as part of a broader compliance and budgeting process. There are several practical trigger points where a business should stop and check whether the CSLR levy framework may affect it.

One trigger point is licensing. If your business is applying for, holding or changing an Australian financial services licence or Australian credit licence, levy exposure should be part of your regulatory cost review.

Another trigger point is market entry or expansion. If you are launching a new regulated product, entering a new distribution channel or moving into a new financial services or credit activity, you should check whether that changes your position under the levy framework.

A further trigger point is complaint exposure. If your business is seeing AFCA complaints, unresolved disputes or fee issues, this instrument is a reminder that unpaid claims and unpaid fees sit inside the broader scheme architecture. Even though the instrument does not regulate complaint handling directly, it points to the financial significance of those issues.

Finally, budgeting and governance are trigger points. If your finance team is setting annual budgets or your board is reviewing regulatory costs, this is the stage to ask whether levy-related provisioning should be considered.

The instrument says that expressions have the same meaning as in the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023 as in force from time to time. That is important because several terms used in the instrument are technical and should not be read casually.

Examples include first levy period, pre-CSLR complaints and AFCA's accumulated unpaid fees. The instrument also refers to the accumulation recovery day in the heading to Part 2. These terms matter because they affect what is counted in the estimate and when the estimate applies.

For a business owner, the practical message is simple. Do not rely on ordinary-language assumptions. A complaint that sounds like it should be included may not be included if it does not fit the statutory definition. A fee amount that seems relevant may be treated differently under the parent Act. The same applies to timing concepts such as the first levy period.

If your business may be in scope, your compliance team should read the definitions in the parent Act before making decisions about levy exposure, provisioning or whether a complaint history is relevant to the scheme.

This instrument itself is narrow. On its face, it mainly determines an amount. It does not set out a complete list of payment, reporting or procedural obligations for businesses. Those practical obligations, if they apply, sit in the parent Act and the wider levy framework.

Even so, there are sensible compliance steps businesses should take if they may be affected. First, confirm whether your business is an entity that can be levied under the parent Act. Second, identify whether your sector is one to which the first levy period arrangements are relevant. Third, make sure your finance and compliance teams understand that this determination may influence levy settings without itself being the document that imposes a direct payment obligation.

Businesses should also review AFCA complaint exposure and any unpaid fee exposure, because the estimate expressly includes AFCA unpaid fee components. Good internal records, clear complaint handling processes and active monitoring of regulatory notices all help reduce confusion when levy issues arise.

For smaller businesses, the practical challenge is often not legal complexity but ownership. Someone in the business should be responsible for tracking levy notices, legislative updates and AFCA-related cost issues. Without that ownership, levy exposure can be missed until it becomes a budgeting problem.

The safest way to read this instrument is as a funding-setting input within a larger statutory scheme. It is not a complete compliance roadmap and it is not a substitute for checking the parent Act.

If you run a small financial advice practice, the practical question is not just whether you have received a levy notice today. It is whether your business operates in a regulated category where levy exposure, AFCA exposure and compensation scheme costs should be built into your compliance and budgeting model.

If you run a credit business or regulated fintech, the same approach applies. This determination should prompt you to review your regulatory footprint, your dispute resolution exposure and your financial provisioning. It is especially relevant if your business is growing, entering new product lines or seeing complaint trends that could increase scheme-related costs.

At the same time, businesses should avoid overstating the effect of the instrument. The determination does not say that every licensee must pay the determined amount, and it does not allocate that amount across individual businesses. Those are matters for the broader framework.

The instrument is dated 3 January 2024. It was registered on the Federal Register of Legislation on 8 January 2024. Under its commencement provision, the whole instrument commenced on the day after registration, which is 9 January 2024.

The register records the instrument as in force. The public register metadata may also show a future repeal date under the Legislation Act 2003. That kind of future date should not be treated as an immediate operational deadline for businesses, but it is still sensible to check the current register entry before relying on the instrument.

Because the instrument adopts meanings from the parent Act as in force from time to time, businesses should also check whether there have been later legislative changes affecting the broader levy framework.

This page is based on the text of the legislative instrument on the Federal Register of Legislation. The instrument is identified as F2024L00028 and is administered by the Department of the Treasury.

Before relying on this page for a business decision, check the current register entry and read the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023 as well. That is particularly important if you need to know whether your business is in scope, how any levy is calculated for your sector, or whether a direct payment obligation has arisen.