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What is the CSLR?

The Compensation Scheme of Last Resort (CSLR) is an Australian Government initiative designed to help victims of financial misconduct and build trust in the finance industry. The CSLR will provide compensation of up to $150,000 to eligible consumers who have an unpaid determination from the Australian Financial Complaints Authority (AFCA) relating to: personal financial advice, credit provision, credit intermediation, or securities dealing. The CSLR operator (a non-for-profit company) has been authorised by the Australian Government to run the scheme, which commenced operations on 2 April 2024.

The CSLR is funded by levies imposed on subsectors of the financial services industry by the . The CSLR operator is responsible for determining the total amount of levy payable by each subsector.

Who is subject to CSLR levies?

As per the , the Compensation Scheme of Last Resort (CSLR) will be funded, on an ongoing basis, through annual levies on the following four defined subsectors of the financial services industry:

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

Who are the entities involved in the operation of the CSLR?

The Australian Financial Complaints Authority (AFCA) is an independent external dispute resolution scheme that deals with consumer and small business complaints about financial firms.

If a complaint can't be resolved between the parties, AFCA might issue a final determination awarding compensation to the consumer. If the financial firm is insolvent and fails to pay the compensation, the consumer may be able to make a claim with CSLR for a compensation payment if they meet the eligibility criteria.

AFCA also helps the CSLR operator estimate costs and AFCA fees for the annual levy, and provides data about complaints and unpaid determinations.

The CSLR operator is responsible for determining the total costs to the scheme for the leviable period.

ob体育 is responsible for calculating the levy amount payable per entity, issuing levy notices and collecting levy payment on behalf of the Australian Government.

The method for calculating an individual entity鈥檚 levy is set out in the .

How much will entities pay and when?

ob体育 will use the industry funding business activity metrics of the qualifying year to calculate the levy amount for the CSLR levy period. The method for calculating an individual entity鈥檚 levy is set out in the .

The qualifying period, for a levy period, means the 12-month period starting 24 months before the start of the levy period.

Example:

Levy Period: 1 July 2024 to 30 June 2025

Qualifying Period: 1 July 2022 to 30 June 2023

CLSR annual levy notices for the 2024-25 leviable year were issued early August 2024.

You may wish to refer to the on the for further information on the CSLR timeline.

Where can I find out more information about CSLR?

Visit the for more information about the scheme.

What are the CSLR levy types?

The legislative framework outlines the following levies can be used to fund the Compensation Scheme of Last Resort (CSLR) scheme:

• Annual levy
• Further levy
• Special levy

Annual levy

The CSLR is primarily funded through annual levies on the following four defined sub-sectors of the financial services industry:

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

As per CSLR , the annual levies are capped at $20 million per sub-sector.

Further levy

In addition to the annual levy collected for a sub-sector, a further levy may be issued for the same levy period if the CSLR operator determines that the total costs are likely to exceed the original estimate. This can occur if there are, or are expected to be, insufficient funds to cover claims, fees, and costs.

As per the CSLR legislation, the total levy (annual and further combined) imposed on a sub-sector for a levy period cannot exceed $20 million.

Special levy

Where the CSLR operator鈥檚 initial cost estimate for a sub-sector exceeds the $20 million cap, ob体育 can only issue the annual levy based on the $20 million cap.

Before a special levy can be issued, the CSLR operator must complete a revised estimate of claims, fees and costs for the relevant levy period. For the 2025-26 levy period, the instrument for the revised estimate can only be registered after 1 July 2025.

If the revised estimate still exceeds the $20 million sub-sector levy cap, the CSLR legislation contains a special funding mechanism called a special levy which involves a ministerial determination.

The Minister has discretion to apply the special levy, including who the levy applies to, the amount of the levy, the timing of the levy and how the levy is calculated for each identified entity. This decision is subject to a parliamentary disallowance process.

The total value of the annual, further and special levies cannot exceed the scheme levy cap of $250 million for a leviable period.

How is my annual levy calculated?

ob体育 will use the industry funding business activity metrics for the qualifying period to calculate the leviable amount for the CSLR levy period. The method for calculating an individual entity鈥檚 levy is set out in the .

The qualifying period, for a levy period, means the 12-month period starting 24 months before the start of the levy period.

Each subsector has a minimum levy component. This levy amount is $100.00.

Entities may also receive a graduated levy component, based on an entity鈥檚 size or level of business activity. A summary of the levies can be found on Compensation Scheme of Last Resort.

What if my entity falls into more than one subsector?

If an entity falls into more than one of the four defined subsectors of the financial services industry, the levy relevant for each subsector is payable. For example, if an entity is both a credit provider and credit intermediary, both levies will be payable, and the levy notice will reflect this.

The four defined subsectors are:

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

What obligations do regulated entities have?

If your entity is subject to the annual CSLR levy, you must register and maintain contact details on the . You will be required to submit business activity metrics via the portal between July and September/October each year as part of the entity鈥檚 industry funding obligations.

ob体育 will use the industry funding business activity metrics of the qualifying year to calculate the leviable amount for the relevant CSLR levy period.

Further information on business activity metrics can be found at: FAQs: ob体育 Industry funding.

Are levies subject to GST?

No. The levies are not subject to GST.

What data will be used to calculate my annual levy?

ob体育 uses the industry funding business activity metrics of the qualifying year to calculate the annual levy amount for the CSLR levy period. The method for calculating an individual entity鈥檚 levy is set out in the .

For the 2024-25 levy period, the qualifying period was the 2022-23 financial year.

For the 2025-26 levy period, the qualifying period is the 2023-24 financial year. The data submitted for the financial year ending 30 June 2024 will be used to calculate the CSLR annual levy for the 2025-26 levy period.

The qualifying period, for a levy period, means the 12-month period starting 24 months before the start of the levy period.

What happens in the circumstance where the number of authorised representatives has reduced since 30 June 2024? Am I still required to pay the levy based on 12-month old information?

ob体育 uses the industry funding business activity metrics of the qualifying year to calculate the levy amount for the CSLR levy period. The method for calculating an individual entity鈥檚 levy is set out in the聽.

The qualifying period, for a levy period, means the 12 month period starting 24 months before the start of the levy period.

For the 2025-26 levy period, the qualifying period is the 2023-2024 financial year.

If a special levy is determined for the 2025-2026 levy period, the qualifying period will be the 2023-2024 financial year.

The graduated levy component for the聽Credit intermediaries聽levy is based on the number of credit representatives at the end of the qualifying year. Even if the number of credit representatives has reduced since 30 June 2024, the levy is calculated based on data from the qualifying period and is payable.

The graduated levy component for the聽Financial advisers on relevant products to retail clients聽levy is based on the number of financial advisers at the end of the qualifying year. Even if the number of financial advisers has reduced since 30 June 2024, the levy is calculated based on data from the qualifying period and is payable.

When is my levy due for payment?

CSLR levies are due for payment 30 business days after the levy notice is issued.

How do I pay my levy?

BPAY

Use the BPAY details provided on your levy notice to pay using BPAY. You must ensure the BPAY reference number is correct. The BPAY reference number will begin with the digits 鈥�409鈥�.

Ensure you allow three business days for electronic processing.

Electronic Funds Transfer

Use the Electronic Funds Transfer details provided on your levy notice to transfer directly from your financial institution. You must ensure the Electronic Funds Transfer reference number is correct. The Electronic Funds Transfer reference number will begin with the digits 鈥�409鈥�.

Credit card

The credit card payment option is available using the ob体育 Regulatory Portal. Portal account holders can to view their CSLR levy notice and make a payment online.

How did ob体育 calculate the levy amount shown on my levy notice?

ob体育 uses the industry funding business activity metrics from the qualifying period to calculate the leviable amount for the CSLR levy period. The method for calculating an individual entity鈥檚 levy is set out in the .

A summary of levies can be found on Compensation Scheme of Last Resort.

What happens if I don鈥檛 pay?

If payment is not received by the due date, a late payment penalty of 20% p.a. calculated monthly will apply until your levy is paid. See CSLR penalties.

If your levy is not paid in full after 12 months, ob体育 may cancel your licence and deregister your company.

Can I apply for a levy waiver or penalty waiver?

We will only consider waiving a levy or penalty in exceptional circumstances when there were issues beyond the control of all representatives of the entity. See more: How to apply for a CSLR levy or penalty waiver.

What happens if I overpaid?

You can request a refund if you have accidently overpaid. We will provide a refund in the same way you made the payment. See more: If you've overpaid.

Can I apply for a payment plan?

In some cases, we can arrange a payment plan that allows you to make industry funding payments in instalments. See more: Details on how to apply for a CSLR payment plan.

Why didn鈥檛 I receive my levy notice online?

If you have received a levy notice via mail (rather than online) it means that you may not have registered an ob体育 Regulatory Portal account to confirm or submit relevant information to ob体育. You are required to account to receive and submit relevant information.

All entities subject to CSLR obligations must pay their levy notice by the due date each year.

I didn鈥檛 know I had CSLR obligations, am I still required to pay my levy?

All entities subject to CSLR obligations must pay their levy by the due date provided on the levy notice. Treasury has reached out to a number of industry associations to provide awareness of the pending levies.

The Government's CSLR arrangements became law in 2023.

The industry funding annual return for the qualifying period advised entities in the relevant subsectors that information provided will also be used to calculate your entity鈥檚 Compensation Scheme of Last Resort (CSLR) levy.

Why have I received a levy notice when I cancelled or varied my licence during the financial year?

Entities that are authorised to operate in a subsector within the qualifying period are subject to CSLR obligations. As per , the qualifying period, for a levy period, means the 12-month period starting 24-months before the start of the levy period.

If an entity was authorised to operate in a subsector during the relevant qualifying period and did not cancel or vary their licence until after the due date of the annual return, the entity is subject to CSLR obligations for the relevant levy period.

I have received an email notification from ob体育 that a CSLR levy is ready for payment, how do I view the levy notice?

ob体育 Regulatory Portal account holders can to view their CSLR levy notice and make a payment online. The page has information on what to do if you have forgotten your password.

Follow these steps to access your levy notice:

1. Log in to your account.
2. Select the relevant entity from your current connections.
3. Navigate to the Administration menu and select 'Billing'.
4. Click on the 'CSLR levy and reminder notices' tab.

Why have I received an industry funding levy notice and a CSLR levy notice?

Industry funding levies and CSLR levies are administered under different legislation - and .

Under the Industry Funding Model, ob体育鈥檚 regulatory costs are funded through appropriation from the Commonwealth. These costs are recovered from the industry sectors we regulate through a combination of:

• industry funding levies charged to 52 subsectors and
• fees for service for user-initiated, transaction-based activities where we provide a specific service to individual entities.

The CSLR is an Australian Government initiative designed to help victims of financial misconduct and build trust in the finance industry. The CSLR will provide compensation of up to $150,000 to eligible consumers who have an unpaid determination from the Australian Financial Complaints Authority (AFCA) relating to: personal financial advice, credit provision, credit intermediation, or securities dealing. The CSLR operator (a non-for-profit company) has been authorised by the Australian Government to run the scheme, which commenced operations on 2 April 2024.

Why is my industry funding levy notice period different from the CSLR levy notice period?

ob体育鈥檚 Industry Funding Model is an 鈥榚x-post model鈥�. This means that the regulatory costs for each subsector are calculated at the end of the financial year based on the actual reported regulatory costs we expend for each subsector.

As required by law, the CSLR operator estimates the costs to fund the scheme during the upcoming levy period. The first levy period, from 2 April 2024 to 30 June 2024 was funded by Government. The subsequent levy periods are funded by the four industry subsectors. For each levy period the levy amount is based on the actuarial estimates of the number of claims expected to be paid during that period.

Visit the for more information about the scheme.

Where can I find CSLR legislation?

Where can I find CSLR regulations?