Current Matter CSLR Legislation

Update

On 8 March the Federal Government re-introduced legislation to establish the Compensation Scheme of Last Resort (CSLR).

 

8 September 2022

Current Matter

On 8 September the Federal Government introduced legislation to establish the Compensation Scheme of Last Resort (CSLR).

The establishment of the CSLR will support ongoing confidence in the financial system’s dispute resolution framework by facilitating the payment of compensation to eligible consumers who have received a determination for compensation from the Australian Financial Complaints Authority (AFCA) which remains unpaid.

AFCA confirms its support for the creation of a CSLR. AFCA believes Australia needs a compensation scheme for people who have the right to a remedy for financial misconduct but who are left without redress when a financial firm becomes insolvent.  

AFCA looks forward to working with the Government and stakeholders to help implement this important reform.

Paused complaints

In April 2020, AFCA paused all complaints against insolvent financial firms while awaiting detail of the scope and timing of a CSLR.

Complaints against insolvent financial firms and other complaints that were on pause while awaiting the introduction of CSLR will continue to be paused and will be assessed once the legislation comes into effect.

AFCA will only be able to fully assess the impact of the CSLR to a complaint when the scheme is legislated. We will review all relevant complaints as soon as that occurs.

AFCA will contact all parties to discuss the status of paused complaints after that review is completed.

Closed complaints 

Closed complaints with determinations against insolvent financial firms that are in favour of a complainant and have unpaid compensation will be reviewed for CSLR eligibility once the legislation comes into effect and the CSLR scope has been legislated.

AFCA will only be able to fully assess the impact of the CSLR to a complaint when the scheme is legislated and the scope of the CSLR has been legislated. 

We will review all relevant complaints as soon as that occurs and contact those that fall within the scope of the scheme. 

More information

More information about the Treasury Laws Amendment (Financial Services Compensation Scheme of Last Resort) Bill 2023 is available here.