The Compensation Scheme of Last Resort (CSLR) has revealed first and second levy period estimates to fund claims from victims of financial misconduct.
CSLR has disclosed estimates for the first two levy periods essential for financing claims by consumers affected by financial misconduct.
The Australian government will fund the first levy period, while the financial services sub-sectors covered by CSLR will finance the second. This approach complements the initial funding from the 10 largest banking and insurance groups during CSLR’s setup phase.
CSLR’s first levy period estimate is set at $4.8 million, adhering to the annual cap of $250m, with the Australian government providing the funds. This estimate is allocated to cover eligible claims and operational costs from CSLR’s start on April 2 to June 30. The breakdown for each sub-sector includes financial advice, credit provision, credit intermediation, and securities dealing, all within the legislated caps.
For the period from July 1 to June 30, 2025, CSLR estimated a need of $24.1m, which is within the scheme’s and subsectors’ annual levy cap. This forecast will address eligible compensation claims and related costs across financial advice, credit provision, credit intermediation, and securities dealing.
The second levy period estimate entered a disallowance phase, during which federal parliament can review and object to the proposed figures within a 15-day timeframe. Following this period, ASIC will proceed to issue and collect the levy on behalf of the federal government.
The estimates are grounded in actuarial principles, with Finity Consulting and Taylor Fry providing the foundational policy, modeling, and analysis. This detailed work ensures CSLR’s estimates are accurate and reliable, ready for review on the CSLR website.
“These latest estimates are another milestone towards the CSLR being able to meet compensation claims from the victims of financial misconduct,” the CSLR board said. “We are committed to a robust and rigorous process that allows us to make the best estimates based on the best information available.”
Following its announcement in January about the initial $241m funding estimate, CSLR is gearing up to start receiving claims by April. This initiative, supported by a comprehensive legislative framework, aims to provide up to $150,000 in compensation to consumers impacted by financial misconduct in specified financial sub-sectors.
For more details on CSLR and its operations starting April 2, visit www.cslr.org.au.
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