The Albanese Government is commencing targeted consultation on the distributions of the 2026-27 special levy for the Compensation Scheme of Last Resort (CSLR).
The CSLR provides compensation to consumers where an eligible determination issued by the Australian Financial Complaints Authority (AFCA) remains unpaid.
In July, the CSLR operator advised that estimated claim costs for 2026-27 were $190.3 million. As these costs exceed the annual levy cap, the CSLR legislation provides for the imposition of a special levy to fund the excess costs so that the scheme can continue paying compensation to eligible consumers.
The Government has announced a package of reforms to strengthen the long‑term sustainability of the CSLR, including a new waterfall framework to allocate special levy costs.
The framework seeks to allocate levy costs to the financial services sub‑sectors most closely connected to the losses giving rise to compensation claims, while limiting the risk that any single sub‑sector bears a levy burden that could adversely affect its financial sustainability and viability.
The consultation paper does not revisit the decision to adopt the waterfall framework. It is a targeted consultation which seeks stakeholder views on the application of the framework to the 2026-27 special levy, including the operation of the first and second tiers of the waterfall and related levy allocation issues.
As this will be the first application of the waterfall framework, stakeholder feedback will help inform both the final 2026-27 special levy determination and the future operation of the framework.
The consultation paper is available on the Treasury website. Submissions close on 5 October 2026.
