CSLR levy underspend expected as claim processing slows

The Compensation Scheme of Last Resort (CSLR) is set to underspend its $24.1 million FY25 levy.

The CSLR said that while the claim volume originally estimated in December 2023 is still expected to eventuate, claims have taken longer than anticipated to reach the CSLR and will now be received in FY26.

The CSLR said more precise details can be expected after the conclusion of the next financial year.

CSLR chief executive David Berry said apart from Dixon Advisory Superannuation Services, other large-scale firm failures, like United Global Capital, will potentially lead to more than 800 claims.

"These failures continue to significantly impact the amount of compensation likely to be paid in the coming financial years. 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," Berry said.

With fewer claims paid, CSLR's operating costs are tracking below the levy estimate.

The scheme continues to focus on ensuring eligible victims of financial misconduct are supported in line with its legislative mandate.