{"id":"C2008A00103","name":"Financial Claims Scheme (ADIs) Levy Act 2008","slug":"financial-claims-scheme-adis-levy-act-2008","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"103 of 2008","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":8065,"registerId":"commonwealth-C2008A00103-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Financial Claims Scheme (ADIs) Levy Act 2008","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\n \n\nFinancial Claims Scheme (ADIs) Levy Act 2008\n\n \n\nNo. 103, 2008\n\n \n\n \n\n \n\n \n\n \n\nAn Act to provide for the imposition of a levy on liabilities of authorised deposit‑taking institutions to their depositors\n\n \n\n \n\n \n\nContents\n\n1 Short title\n\n2 Commencement\n\n3 Definitions\n\n4 Regulations may impose levies\n\n5 Amount of levy\n\n6 Regulations\n\n \n\n![](image.001.png)\n\n \n\n \n\nFinancial Claims Scheme (ADIs) Levy Act 2008\n\nNo. 103, 2008\n\n \n\n \n\n \n\nAn Act to provide for the imposition of a levy on liabilities of authorised deposit‑taking institutions to their depositors\n\n[Assented to 17 October 2008]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act may be cited as the Financial Claims Scheme (ADIs) Levy Act 2008.\n\n2  Commencement\n\n (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provision(s) Commencement Date/Details\n- 1. Sections 1 and 2 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 17 October 2008\n- 2. Sections 3 to 6 The later of:(a) the start of the day on which this Act receives the Royal Assent; and(b) the commencement of Schedule 1 to the Financial System Legislation Amendment (Financial Claims Scheme and Other Measures) Act 2008.However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur. 18 October 2008\n\n\nNote: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.\n\n (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.\n\n3  Definitions\n\n  In this Act:\n\nADI has the same meaning as in the Banking Act 1959.\n\nAPRA has the same meaning as in the Banking Act 1959.\n\nAPRA’s financial claims scheme costs for an ADI in relation to which Subdivision C of Division 2AA of Part II of the Banking Act 1959 applies or applied means the sum of:\n\n (a) entitlements under that Subdivision relating to the ADI; and\n\n (b) the costs of the following:\n\n (i) the administration of that Division in relation to the ADI;\n\n (ii) the exercise of APRA’s powers under that Division in relation to the ADI;\n\n (iii) the performance of APRA’s functions under that Division in relation to the ADI; and\n\n (c) the costs of any borrowing under section 54E of the Australian Prudential Regulation Authority Act 1998 connected with the application of that Subdivision in relation to the ADI.\n\nlevy means levy imposed under this Act.\n\n4  Regulations may impose levies\n\n (1) In connection with the application of Subdivision C of Division 2AA of Part II of the Banking Act 1959 in relation to an ADI, the regulations may impose levy on the liabilities that:\n\n (a) are liabilities of ADIs in a class prescribed by the regulations to their depositors; and\n\n (b) exist at the end of a financial year or other 12‑month accounting period used instead of a financial year.\n\n (2) The regulations must prescribe the class for the purposes of paragraph (1)(a) so as to exclude all ADIs in relation to which that Subdivision applies.\n\n5  Amount of levy\n\n (1) The amount of levy is the amount worked out in accordance with the regulations.\n\n (2) However, the amount of levy on an ADI’s liabilities to its depositors cannot be more than 0.5% of the amount, worked out in accordance with the regulations, of those liabilities.\n\n (3) The regulations may prescribe:\n\n (a) different ways of working out for the purposes of subsection (1) the amount of levy on liabilities of ADIs in different classes prescribed by the regulations; and\n\n (b) different ways of working out for the purposes of subsection (2) the amounts of liabilities of ADIs in different classes prescribed by the regulations.\n\n6  Regulations\n\n (1) The Governor‑General may make regulations prescribing matters required or permitted by this Act to be prescribed.\n\n (2) Before the Governor‑General makes a regulation affecting the imposition or amount of a levy connected with the application of Subdivision C of Division 2AA of Part II of the Banking Act 1959 in relation to an ADI, the Minister must be satisfied the regulation will help achieve the objective in subsection (3) of this section.\n\n (3) The objective is that the total amount of levy connected with the application of that Subdivision in relation to the ADI equal the excess of APRA’s financial claims scheme costs for the ADI over the sum of amounts paid to APRA by the ADI in connection with that Division or in the winding up of the ADI.\n\n \n\n \n\n \n\n \n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 15 October 2008\n\nSenate on 16 October 2008]\n\n(205/08)\n\n \n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This Act, as drafted, implements a narrowly defined power: it authorises regulations to levy ADIs to meet APRA’s Financial Claims Scheme costs net of amounts already paid by the ADI. The measure remains confined to that funding purpose and delegates detailed design to regulations. There is no material expansion beyond that original, stated purpose in the text provided."},"complexity_factors":["Short statute: 6 substantive sections (including definitions)","4 defined terms in the interpretation section (ADI; APRA; APRA’s financial claims scheme costs; levy) (s3)","Heavy reliance on delegated legislation — core operational detail left to regulations (s4, s5, s6)","Cross-references to other statutes: Banking Act 1959 (Subdivision C of Division 2AA of Part II) and APRA Act 1998 (s54E) (s3, s4)","Cap plus discretionary methodology: statutory cap of 0.5% combined with multiple possible regulatory calculation methods and class distinctions (s5(2)–(3))","Ministerial satisfaction condition before regulations changing levies may be made (adds an administrative threshold) (s6(2))","Conditional commencement tied to another Act’s schedule (adds timing complexity) (s2)","Permits different accounting periods and different classes with separate calculation methods — introduces branching logic for compliance (s4(1)(b), s5(3))"],"plain_english_summary":"**What this law does (mechanically)**\n\n- Gives the Governor‑General power to make regulations that impose a levy (a compulsory charge) on certain authorised deposit‑taking institutions (ADIs) to their depositors (s4, s6).\n- The regulations must specify which class(es) of ADIs are charged and must exclude any ADI already covered by the specific part of the Banking Act mentioned (Subdivision C of Division 2AA of Part II) (s4(2)).\n- The regulations set how the levy is calculated; the Act caps the levy on an ADI’s liabilities to depositors at 0.5% of those liabilities (s5(1)–(2)). The regulations may permit different calculation methods for different classes of ADIs or different accounting periods (s5(3), s4(1)(b)).\n- The Minister must be satisfied that any regulation imposing or changing a levy will help achieve the objective that total levies equal the excess of APRA’s Financial Claims Scheme (FCS) costs for the ADI over amounts already paid to APRA by that ADI (s6(2)–(3)).\n\n**Who is affected**\n\n- Primary payers: ADIs that are in classes prescribed by the regulations (s4). The Act leaves it to regulations to define which ADIs are charged and to exclude those already subject to the Banking Act Subdivision (s4(2)).\n- Indirectly affected: depositors, because the levy is calculated on ADIs’ liabilities to depositors and ADIs may adjust pricing, product terms, or behaviour in response.\n- APRA (the Australian Prudential Regulation Authority) is the recipient of the funds used to meet FCS costs (definition of APRA’s financial claims scheme costs).\n\n**Why it matters (purpose claimed by the Act and how it works in practice)**\n\n- Stated purpose: to raise funds to meet APRA’s costs under the Financial Claims Scheme (FCS) when that Subdivision of the Banking Act applies to an ADI. Mechanically, levies are intended to cover the amount by which APRA’s FCS costs for an ADI exceed amounts already paid by that ADI (s6(3)).\n- What the cost base is: APRA’s FCS costs for an ADI include statutory entitlements under the relevant Banking Act Subdivision, APRA’s administration and exercise of powers and functions in relation to that ADI, and costs of borrowing under s54E of the APRA Act (definition in s3).\n\n**Key implementation features, incentives and trade‑offs**\n\n- Delegation and discretion: the Act delegates practically all detail (who pays, how liabilities are measured, accounting periods, calculation methods) to regulations (s4, s5, s6(1)). That concentrates decision‑making in the executive rule‑making process rather than the statute.\n- Cap on exposure: individual ADIs face a statutory cap of 0.5% of prescribed liabilities to depositors (s5(2)). The regulations determine the base to which that cap applies (s5(1)–(3)).\n- Targeting of costs: the objective in s6(3) ties the levy total to APRA’s FCS costs net of amounts already paid by the ADI; in practice, this aims to allocate incremental FCS funding to ADIs via levies rather than general revenue.\n- Compliance and measurement burden: ADIs will need to measure liabilities according to regulatory specifications (which may vary by class and period) and pay accordingly. The Act allows different methods for different classes, which raises complexity for firms operating across classes (s5(3)).\n- Pass‑through risk and market effects: while the Act charges ADIs, firms may seek to pass costs onto depositors (through lower deposit rates or fees) or adjust product offerings. The statute does not limit ADIs’ ability to do so; these are commercial responses rather than statutory requirements.\n\n**Implementation risks and administrative considerations**\n\n- Reliance on regulations: the Act is short and requires regulations to define almost every operational detail. That means the exact incidence, timing, and calculation of levies depend on subsequent rule‑making (s4, s5, s6).\n- Ministerial gate: a regulation must be consistent with the objective in s6(3) and the Minister must be satisfied of that before making regulations that affect levies (s6(2)–(3)). This introduces an administrative safeguard but also a discretionary threshold.\n- Interaction with other law: the Act cross‑references the Banking Act (Subdivision C of Division 2AA of Part II) and the APRA Act (s54E) to define scope and cost items (s3, s4). Practical application depends on how those provisions operate in particular cases.\n\n**Who pays, who decides, and what behaviour changes (summary)**\n\n- Who pays: ADIs in classes prescribed by regulations pay the levy; depositors are the reference base for measurement (s4, s5).\n- Who decides: the Governor‑General makes regulations (s6(1)); the Minister must be satisfied the objective in s6(3) is met before regulations affecting levy imposition or amount are made (s6(2)).\n- Behaviour change: ADIs must calculate and pay levies per the regulations; they may respond commercially (pricing, product design, capital/liquidity planning) to absorb or pass on costs.\n\n**Sections cited:** s3 (definitions), s4 (regulations may impose levies), s5 (amount and cap), s6 (regulations and objective)."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose: providing a statutory basis for levies to fund the Financial Claims Scheme when activated for ADIs. The scope has not expanded beyond this specific funding mechanism."},"complexity_factors":["Very short statute — only 6 operative sections","Heavy reliance on external legislation (Banking Act 1959, APRA Act 1998) for definitions and context — requires cross-referencing to understand when Subdivision C of Division 2AA of Part II applies","Nested defined terms: 'APRA's financial claims scheme costs' is a complex composite definition involving three distinct cost categories (entitlements, administration costs, borrowing costs)","Conditional commencement provisions linking to another Act (Financial System Legislation Amendment Act 2008)","Substantive content delegated entirely to regulations — the Act is essentially a framework with blanks to be filled in later"],"plain_english_summary":"**What this law does**\n\nThis Act creates a mechanism for the government to charge banks and other deposit-taking institutions a special levy (a type of tax) to help pay for the **Financial Claims Scheme** — the safety net that protects ordinary people's bank deposits if their bank collapses.\n\n**Who it affects**\n\n- **Authorised Deposit-taking Institutions (ADIs)** — this includes banks, building societies, and credit unions that are licensed to take deposits from customers.\n- **Depositors** — indirectly, because this levy helps ensure the deposit guarantee scheme remains funded and stable.\n\n**How it works**\n\n- The Act itself doesn't set the actual dollar amounts. Instead, it gives the government power to make **regulations** (secondary laws) that impose the levy when needed.\n- The levy is calculated based on what the bank owes to its depositors (customer deposits).\n- There's a **cap**: the levy cannot exceed 0.5% of the bank's deposit liabilities.\n- The levy only applies when the Financial Claims Scheme has been activated for a particular bank — that is, when the government has stepped in to protect depositors of a failed institution.\n- The money raised is meant to cover APRA's costs in running the scheme, including paying out protected deposits and administering the process.\n\n**Why it matters**\n\nThis is a \"user-pays\" style funding mechanism. When a bank fails and the government guarantees deposits, someone has to pay for that protection. This Act ensures that the costs can be recovered from the banking industry itself — or specifically from the class of institutions connected to the failure — rather than leaving taxpayers to foot the entire bill. It helps keep the deposit guarantee scheme financially sustainable.\n\n**Key limitation**: The regulations must exclude any bank that is currently in the scheme (being wound up) from paying the levy — you don't charge the failed bank itself to pay for its own failure."}},"importantCases":[],"_links":{"self":"/api/acts/financial-claims-scheme-adis-levy-act-2008","history":"/api/acts/financial-claims-scheme-adis-levy-act-2008/history","analysis":"/api/acts/financial-claims-scheme-adis-levy-act-2008/analysis","conflicts":"/api/acts/financial-claims-scheme-adis-levy-act-2008/conflicts","importantCases":"/api/acts/financial-claims-scheme-adis-levy-act-2008/important-cases","documents":"/api/acts/financial-claims-scheme-adis-levy-act-2008/documents"}}