Financial Services Compensation Scheme of Last Resort Levy 2022

# Financial Services Compensation Scheme of Last Resort Levy Bill 2022 ## What it does The government is creating a new levy (a type of fee) that financial services companies must pay to fund AFCA — the Australian Financial Complaints Authority. This levy covers situations where AFCA needs money to compensate people when a financial company has gone under or can't pay what it owes customers. ## Why it matters When a bank, investment firm, or insurance company collapses, customers need someone to step in and help them recover lost money. This levy ensures AFCA has enough funding to do that job, rather than leaving everyday Australians out of pocket when financial institutions fail. ## Key details - **Who pays:** Financial services companies operating in Australia — including banks, investment advisers, and insurance providers across different sectors - **How much:** The levy is capped per sector (banking, insurance, etc.), so it doesn't spiral out of control, though companies can be hit with additional levies if claims exceed the cap - **When it starts:** The law takes effect the day after Parliament approves it - **Flexibility built in:** The bill allows the government to adjust how the levy is calculated and spread across sectors depending on actual claims and costs each year