AFCA is required to make adjustments to our compensation caps and monetary limits every three years in line with CPI/ wage indexation, as required by ASIC Regulatory Guide 267 and the AFCA Rules.
AFCA last adjusted its compensation caps and monetary limits by publishing a new version of our Rules in January 2021.
What are compensation caps?
There are limits to the compensation amounts that may be awarded by an AFCA Decision Maker in certain circumstances, as well as monetary restrictions on AFCA’s jurisdiction. These are known as our compensation caps and monetary limits, and they are outlined in the tables in section D.4 of AFCA’s Rules and Operational Guidelines. Different compensation caps and monetary limits will apply to complaints depending on when the complaint was first lodged with AFCA.
What’s changing?
AFCA is required to adjust the maximum amount that can be claimed and awarded in a complaint. These adjustments will be applied to non-superannuation complaints received by AFCA on or after 1 January 2024.
In accordance with Rule D.4.3 AFCA’s monetary limit and compensation caps will be adjusted by the higher of the percentage increase in:
- The CPI weighted average of eight capital cities, based on the most recent 3 years of data issued by the Australian Bureau of Statistics (ABS), and
- The male total average weekly earnings for the same 3-year period of data issued by the Australian Bureau of Statistics (ABS).
The complete indexation adjustments are outlined in the table below. This table will be inserted into section D of AFCA’s updated Rules and Operational Guidelines. The updated Rules will be published on our website on 2 January 2024.
Limits applying to complaints submitted to AFCA from 1 January 2024
|
|
Row |
Type of claim |
Compensation amount limit per claim |
Monetary restriction on AFCA’s jurisdiction |
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|---|---|---|---|---|---|---|---|---|
|
Claim for direct financial loss |
1 |
Income Stream Insurance Claim on a Life Insurance Policy or a General Insurance Policy dealing with income stream risk or advice about such a contract. If the claim is in excess of this monthly limit, the monthly limit will apply unless:
If this is the case, then the limit will be the amount in row 6. |
$16,900 per month |
Amount claimed by Complainant must not exceed $1,263,000 |
||||
|
2 |
General Insurance Broking Claim against a General Insurance Broker except where the claim solely concerns its conduct in relation to a Life Insurance Policy (in which case row 1 or 6 applies, as the case may be). |
$316,000 |
Amount claimed by Complainant must not exceed $1,263,000 |
|||||
|
3 |
Uninsured Motor Vehicle Claim under another person’s Motor Vehicle Insurance Product for property damage to an Uninsured Motor Vehicle caused by a driver of the insured motor vehicle – see B.2.1 f)(i) |
$19,000 |
Amount claimed by Complainant must not exceed $1,263,000 |
|||||
|
4 |
Credit Facility |
Claim arising from a credit facility provided to a Small Business or Primary Producer – see C.1.2e and C.1.3b |
by a borrower |
of a Small Business loan |
$1,263,500 |
Credit facility must not exceed $6,317,000 |
||
|
of a Primary Producer loan |
$2,526,500 |
|||||||
|
by a guarantor to set aside a guarantee supported by security over |
the guarantor’s principal place of residence |
unlimited |
Credit facility must not exceed $6,317,000 |
|||||
|
other security |
for a Small Business loan |
$1,263,500 |
Credit facility must not exceed $6,317,000 |
|||||
|
for a Primary Producer loan |
$2,526,500 |
|||||||
|
5 |
Claim arising from a credit facility that was provided to someone other than a Small Business or Primary Producer |
by a borrower |
$631,500 |
Amount claimed by Complainant must not exceed $1,263,000 |
||||
|
by a guarantor to set aside a guarantee supported by security over |
the guarantor’s principal place of residence – see C.1.2e |
unlimited |
unlimited |
|||||
|
other security |
$631,500 |
Amount claimed by Complainant must not exceed $1,263,000 |
||||||
|
6 |
All other claims (excluding Superannuation Complaints) In any other circumstance by any Complainant (whether or not a Small Business or Primary Producer) |
$631,500 |
Amount claimed by Complainant must not exceed $1,263,000 |
|||||
|
|
7 |
Claim for indirect financial loss |
$6,300 |
not applicable |
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|
|
8 |
Claim for non-financial loss |
$6,300 |
not applicable |
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The compensation caps and monetary limits set out in section D.4.3 of the Rules do not apply to Superannuation complaints.
These changes do not apply to the costs of pursuing a complaint, such as legal or other professional costs incurred by a Complainant as set out in section D.5 of the Rules. This is because the indexation does not apply to the limits for these costs.
More information
Visit our website to learn more about AFCA’s monetary limits for general complaints.
