Compensation Scheme of Last Resort

The Compensation Scheme of Last Resort (CSLR) is an independent, not-for-profit company which commenced operations on 2 April 2024. Visit the CSLR website for more information about the scheme.

The CSLR will provide compensation of up to $150,000 to consumers who have an unpaid determination from the Australian Financial Complaints Authority relating to personal financial advice, credit intermediation, securities dealing or credit provision, and meet other eligibility criteria. A determination may be unpaid because the financial institution subject to the determination has become insolvent.

From 1 July 2024, the CSLR will be funded by levies imposed on parts of the financial services industry. Under the CSLR legislative framework:

The CSLR operator is responsible for determining the total costs for the leviable period; and
ASIC is responsible for issuing levy notices and collecting levy payments.

The information below is for industry participants required to pay the annual levy.

About the annual levy

Who is subject to the annual levy?

The CSLR is funded by an annual levy payable by:

licensees that provide personal advice to retail clients on relevant financial products
credit providers
credit intermediaries
securities dealers.

How are annual levies calculated?

The CSLR operator determines the total estimated costs in each subsector for the relevant levy period. Visit the CSLR website for information about the estimate.

ASIC uses the estimate determined by the CSLR operator to calculate the leviable amount per entity. The amount of levy imposed on a person in a subsector is the sum of:

the minimum levy component ($100), and
the graduated levy component.

Where the CSLR levy estimate for a particular sub-sector exceeds $20 million, the CSLR legislation caps the amount that can be levied at $20 million. For example, if the CSLR estimates the costs for a subsector to be $50 million, ASIC will calculate the sub-sector annual levy based on the $20 million cap. Whether the remaining amount (e.g. $30 million) is imposed as a special levy is subject to the Minister’s discretion and is subject to a parliamentary disallowance process.

ASIC will use the 2023-24 Industry Funding business activity metrics to calculate the leviable amounts for the 2025-26 CSLR levy period. This instrument relates to ASIC’s metric collection:

ASIC (Financial Services Compensation Scheme of Last Resort Levy—Return Deadline) Notice 2024/408

The method for calculating an individual entity’s levy is set out in the Financial Services Compensation Scheme of Last Resort Levy Regulations 2023.

Summary of annual levies

The summary of levies for the 2025-26 levy period is to assist entities in understanding how the annual levy amounts have been calculated.

Subsector	Period Estimates ¹	Number of entities	Levy metric and description	Actual levy amounts ²
Credit providers	$2.799 million	1,013	Credit provided in the financial year (contracts other than small and medium amount credit contracts)	Minimum levy of $100 plus $3.62 per $1 million of credit provided above $100 million (for other than small and medium amount credit contracts)
Credit intermediaries	$2.723 million	4,137	Credit representatives and number of days authorised	Minimum levy of $100 plus $52.04 per credit representative
Securities dealers	$2.343 million	1,133	Annual transaction turnover value	Minimum levy of $100 plus $16.12 per $1 million of annual transaction turnover
Licensees that provide personal advice to retail clients on relevant financial products	$20³ million	2,680	Adjusted number of advisers on the financial advisers register and number of days authorised	Minimum levy of $100 plus $1,295 per adviser

1 Amounts are rounded to the nearest $1000.

2 Levy amounts have been rounded.

3 The total estimate for the sub-sector is $70.110 million, however ASIC is required to cap the annual levy at $20 million. Whether the remaining amount (e.g. $50.110 million) is imposed as a special levy is subject to the Minister’s discretion. For more information refer to the special levy FAQ.

Notices for the annual levy

Before ASIC can issue the annual levy notices, the following steps must take place:

The CSLR operator registers the levy instrument and explanatory memorandum on the Federal Register of Legislation
The instrument is tabled in each House of Parliament within 6 sittings days of being registered
A ‘Disallowance period’ of 15 sitting days for each House of Parliament needs to be satisfied.

ASIC aims to issue notices for the 2025-26 annual levy within 30 days of the disallowance period ending.

The levy notices will be available for account holders via the ASIC regulatory portal. For those not yet registered on the portal, the notice will be sent via mail to the address registered with ASIC. Levies will be due for payment 30 business days after issue.