Shorter CSLR payout timeframe awaits major bill passage

The looming passage of a major bill will amend how levies are collected under the Compensation Scheme of Last Resort (CSLR) and, in turn, speed up compensation payments to eligible victims.

The reform is part of the Regulatory Reform Omnibus Bill 2026, which includes a proposed amendment to the Corporations Act that will reduce the disallowance period of the CSLR special levy instruments while retaining parliamentary oversight.

"This will allow the CSLR special levy for the 2026-27 levy period to be made and take effect quicker, enabling the CSLR operator to recommence paying compensation to victims of financial misconduct in a timely manner," an explanatory memorandum reads.

Under the current framework, ASIC does not collect special levies until the 15 sitting day disallowance period has expired, due to the risks of invoicing entities for amounts that are subsequently amended, reduced or disallowed.

The amendment changes the disallowance period for CSLR levy instruments from 15 sitting days to five sitting days in each House of Parliament.

One of the key issues is that currently, the period between the CSLR notifying the minister of a funding shortfall and receipt of funds can average more than eight months. This ultimately contributes to delays in compensation payments to eligible consumers, including those who have already been determined to be eligible for compensation.

"The reduction in the disallowance period aligns with the treatment of levy instruments under the ASIC Industry Funding Model. As ASIC also administers the CSLR levies, this removes the different disallowance treatments between levies," Treasury said.

Melinda Kee, who spearheads the advocacy group SOS Save Our Super, welcomed the change, saying if the government can cut months out of the process and get people their compensation sooner, then it should.

"My concern has always been the gaps between AFCA, the CSLR and the funding. Victims shouldn't get through one hurdle only to find another one waiting for them. We know there are a lot of claims coming. The CSLR needs to be able to flag the need for funding earlier, rather than waiting until the pressure is already there," she said.

"At the end of the day, these are people's retirement savings. Every month we can take out of the waiting process is a month that matters."

Financial services minister Daniel Mulino introduced the Regulatory Reform Omnibus Bill 2026 in May, which aims to simplify regulation, particularly for businesses, progress additional measures to support the government's "tell us once" agenda, which will cease people and businesses entering the same information more than once when interacting with government agencies.

In total, the bill amends 26 acts, repeals two acts and improve the operations of 19 government agencies.

This week, the bill moved to a second reading debate.

Greens senator David Shoebridge said his party would not oppose the bill.

"On a broader level, the various elements in the bill proposing a tell-us-once model, so that information does not have to be repeatedly handed to agencies, has some sense in it, of course being mindful that people's privacy and protections for their data are always central to the Greens' concerns on regulatory reform," he said.

Kee commented: "Minister Mulino and his team deserve credit. They're working through some difficult problems, and we are starting to see practical changes that will actually help people."

"I'd love to see all sides of politics support this. There are thousands of Australians caught up in this mess. Getting compensation to them sooner should be something everyone can agree on. We've come a long way in a few weeks. Now I'm keen to see the roadmap for what comes next and keep that momentum going."

In April 2026, Treasury consulted on Options to improve the ongoing sustainability of the CSLR, including a proposal to reduce the disallowance period for CSLR levy instruments from 15 sitting days to five sitting days.

Treasury said it received strong stakeholder support for the proposal on the basis that it would improve the timeliness of levy collection and compensation payments, as well as improve certainty for industry.

Treasury on August 19 announced its intention to align the disallowance arrangements applying to CSLR levy instruments with those that apply to ASIC industry funding levy instruments.