The pre-CSLR complaints estimate was the first estimate provided under the legislative framework passed by the Australian Government in June 2023.

Further estimates and annual levies will be calculated for the following periods:

• Year 1 (April–June 2024): funded by the Australian Government.

• Year 2 and ongoing (July 2024–June 2025): funded by relevant sectors of the financial services industry.

The legislation determines the levy as an estimate that is the sum of

The total value of this one-off levy cannot exceed the scheme levy cap of $250 million.

The pre-CSLR estimate, following legislative processes, will form a one-off levy that is expected to pay eligible compensation claims from the pre-CSLR complaint backlog from 1 November 2018 to 7 September 2022.

Any complaints lodged from 8 September 2022 onward will be funded by annual levies.

The legislation required payment of this pre-CSLR complaints levy by the ten-largest banking and general/life insurance groups by income from financial year 2021-2022, as reported by the Australian Taxation Office (ATO).

The CSLR board determined a pre-CSLR complaints estimate of $241 million, which falls within the $250 million cap set in the legislation.

In accordance with the Act and its statutory obligations, the CSLR Board determined the estimate having due regard to actuarial principles and in cooperation with qualified and recognised experts.

The Board did not deviate from the estimate determined in the report from independent actuarial consultant, Finity Consulting.

The Board reasonably believed, noting the prudent and realistic assumptions made by Finity Consulting, that the estimate accurately reflected the expected cost of meeting the pre-CSLR complaints.

It is further noted that a second independent actuarial consultant, Taylor Fry, endorsed the methodology, analysis and determination of Finity Consulting.

FY2024 levy period estimate of $4.8m

• Funded by the Australian Government.
• This estimate covers eligible compensation claims, AFCA fees, the CSLR operating costs and capital reserve contributions between 2 April 2024 to 30 June 2024.

The Principal Actuary’s initial levy estimate recommendation was $4.8m. A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

Sub-sector breakdown

FY2025 levy period estimate of $24.1 million

• Funded by the 4 financial subsectors covered by the CSLR.
• This estimate, following legislative processes, covers eligible compensation claims, AFCA fees, the CSLR operating costs, ASIC administration costs and capital reserve contributions between 1 July 2024 to 30 June 2025.

The Principal Actuary’s initial levy estimate recommendation was $4.8m. A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

Sub-sector breakdown

FY2026 levy period estimate of $77.97 million

The CSLR engaged the services of the Principal Actuary to undertake the detailed modelling and analysis, ensuring compliance with legislative requirements and confidence in the estimates.

The Principal Actuary’s initial levy estimate recommendation was $77,975,000.

A full copy of the report is available to provide transparency of the estimates modelling and assumptions.

A summary of the actuaries estimates is outlined below:

• As the initial levy estimate for the financial advice sub-sector exceeds the $20 million cap, ASIC can only issue the annual levy up to $20 million at the sub-sector level.
• The amount above $20 million for the financial advice sub-sector will require funding via a special levy with formal notification of this requirement to be made to the Minister for Financial Services early in FY26. Consistent with the legislation, the CSLR will complete a revised levy estimate for FY26.
• The consideration of any special levy will be determined by the Minister and subject to separate parliamentary approval.

Sub-sector breakdown