AFCA Jurisdiction and Monetary Limits: $1.263M Cap from 1 January 2024

Consumer claim and credit limits (from 1 January 2024)

From 1 January 2024, the monetary limit for consumer claims that AFCA can hear has increased to $1,263,000. This replaces the previous limit of $1,085,000, which was in place from 1 January 2021 to 31 December 2023. AFCA is required to adjust these caps every three years, based on the higher of the Consumer Price Index or Male Total Average Weekly Earnings, and the next adjustment is due 1 January 2027. ASIC RG 271 internal dispute resolution provides further guidance on dispute resolution.

The monetary limit for small business credit facility claims, and for primary producers’ credit facility claims, has increased to $6,317,000. This aligns the primary producers’ limit with that of small businesses.

These adjustments reflect AFCA’s ongoing commitment to ensuring it can appropriately handle a wide range of disputes.

Specific product sub-limits

Certain financial product categories have specific monetary limits that apply within AFCA’s overall jurisdiction. For income protection insurance disputes, AFCA can award up to $13,400 per month for income loss compensation. General insurance broker disputes and uninsured third-party motor vehicle claims also operate under distinct compensation caps as outlined in the AFCA Rules. Vulnerable customer protections in financial services may also be relevant in these situations.

Superannuation complaints are an exception to the standard monetary limit. Because the underlying SCT jurisdiction transferred to AFCA was uncapped, superannuation complaints are not subject to a monetary limit.

Consumer credit insurance complaints generally fall under the standard $1,263,000 limit. However, specific sub-product carve-outs may apply, meaning some consumer credit insurance complaints are subject to different limits as detailed in the AFCA Rules.

AFCA's scope of jurisdiction

AFCA was established under the Treasury Laws Amendment (Putting Consumers First-Establishment of the Australian Financial Complaints Authority) Act 2018. Membership is mandatory for Australian Financial Services Licence (AFSL) holders, Australian Credit Licence (ACL) holders, Registered Superannuation Entity (RSE) licensees, payment platform operators (under Treasury reforms), and Buy Now Pay Later (BNPL) providers (from 10 June 2025). CSLR Compensation Scheme of Last Resort provides a safety net for consumers in limited circumstances.

AFCA’s jurisdiction covers complaints relating to banking, credit, general insurance, life insurance, superannuation, investments, and financial advice. This broad scope ensures consumers have an accessible avenue for dispute resolution across a wide range of financial products and services.

Complaints must usually be lodged within 6 years of awareness, although this timeframe is reduced to 2 years for superannuation death-benefit objection disputes. AFCA decisions up to the monetary limit are binding on the financial firm if accepted by the complainant; otherwise, the complainant retains the right to pursue court action.

Interaction with IDR and CSLR

Complainants must first lodge an internal dispute resolution (IDR) complaint and receive an IDR response (or 30 days elapse) before AFCA accepts the case. This requirement aligns with ASIC RG 271 internal dispute resolution guidelines. AFCA scheme funding is via member levies plus user-pays case fees set under the AFCA Funding Model.

The Compensation Scheme of Last Resort (CSLR) provides coverage for unpaid AFCA determinations against insolvent firms. From April 2024, the CSLR will cover claims up to $150,000 per claim in eligible sub-sectors.

AFCA decisions are recognised by the Banking Code of Practice, Insurance Code of Practice, and Customer Owned Banking Code of Practice. Members are required to comply with AFCA determinations, and non-compliance can trigger certain ASIC enforcement powers.