The Compensation Scheme of Last Resort (CSLR) will not fully utilise the $24.1m levy raised for the 2025 financial year, as slower claim processing moves payments into future years.
Although the volume of claims originally forecast in December 2023 is still expected to materialise, delays in cases reaching the CSLR mean a significant portion will be processed in FY26. The revised timeline has prompted the scheme to project an underspend for the current year.
CSLR CEO, David Berry, says that beyond the Dixon Advisory Superannuation Service, the CSLR has seen multiple large-scale firm failures within the personal financial advice sector, with at least two failures potentially leading to more than 800 claims.
“These failures continue to significantly impact the amount of compensation likely to be paid in the coming financial years,” he says. “The key driver to the timing of payments remains the speed at which the CSLR receives claims.
“The projected underspend will be utilised to pay compensation in subsequent financial years and be offset against the FY27 levy estimate.”
Operating costs are also tracking below expectations due to the reduced volume of paid claims.
Despite the delay, the CSLR reaffirmed its commitment to supporting victims of financial misconduct in line with its legislative obligations. More detailed financial updates are expected after the end of the financial year.
I am still at a loss to figure out why I have to pay for someone else's failure. Why doesn't the Government levy all the Builders in Australia every time a large Builder goes broke and leaves people without a home. We are an easy target who don't control any votes.
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