The Mortgage & Finance Association of Australia (MFAA) has welcomed updated levy estimates for the Compensation Scheme of Last Resort (CSLR), which show a significant reduction for the credit intermediary sector. The revised estimate for the 2025–26 financial year brings the levy down from the original $2.723 million announced in January to $1.833 million, reflecting a drop of more than 30%.
“It’s pleasing to see that the CSLR is expecting to receive fewer unpaid determinations for the broking sector,” said MFAA executive, policy and legal, Naveen Ahluwalia. “This is a clear sign that the broking sector continues to thrive.”
The change comes after the CSLR released its latest projections. The MFAA noted this shift as a positive signal of the sector’s continued performance in delivering outcomes with low levels of consumer complaints and unpaid resolutions.
The levy for credit representatives remains at $52.04 per representative, consistent with the January estimate. The MFAA stated this figure was unaffected due to existing legislative processes. However, any resulting surplus from the revised estimates may be carried forward as a credit against future years’ levies.
While the update offers relief to brokers, concerns remain regarding a separate special levy linked to the personal financial advice sub-sector. This sub-sector has exceeded its $20 million cap, prompting discussions on how to manage the required $47.3 million special levy.
The decision now lies with the Minister for Financial Services, who must determine whether the special levy should be distributed across all four CSLR sub-sectors or addressed through alternative funding measures. The MFAA maintains that the broking sector’s minimal involvement in pre-CSLR unpaid determinations, as reflected in the revised figures, should be considered when assessing the allocation of these additional costs.
The industry body has reiterated calls for a sustainable and fair funding model for the CSLR, aligned with the actual risk profile and historical conduct of each sub-sector.
As the Treasury review into CSLR funding progresses, the MFAA has expressed interest in its outcomes, underscoring the importance of equitable distribution of levies and transparency in the scheme’s administration.
“We need a more sustainable funding model for the CSLR and look forward to the outcome of the Treasury review,” noted Ahluwalia.
