The user charge is a fixed annual amount which is calculated at the end of the financial year.
The user charge is proportionately allocated based on the number, closure point and complexity of the complaints each Member closed in the relevant financial year, compared with same data for all members in the same period.
About the user charge under the new model
Threshold
The user charge applies to members who receive six or more complaints in the financial year. Members who have less than six complaints closed in the financial year do not incur a user charge.
Proportion
AFCA targets an approximately 50/50 split between fixed (user charge and annual registration fee) and variable (complaint fee) funding. However, the exact proportion may shift from year to year between 5-10% due to the variable nature of complaint volumes.
Flexible invoicing
Members with a user charge over a certain threshold are automatically invoiced monthly, however, at the beginning of each financial year, these members can opt to receive their user charge invoices quarterly, bi-annually or annually.
User charge calculation steps
- Identify the number of complaints closed for each member in the year.
- Remove complaints where the member had five or less complaints closed in the year. These members will not receive a user charge and their complaints are not included in the calculation of other members' charges.
- Identify at what point the complaints were closed in AFCA’s process and remove those closed at Registration & Referral, Rules and free complaints. These complaints are not used to calculate the percentage share of each member.
- Calculate the total complaint fees to each Member for the year.
- Calculate the total amount of complaint fees for the year.
- Divide the total complaint fees for each member (from step 4) by the total complaint fees (from step 5) to give each Member a percentage share.
- Use the percentage share (from step 6) to apportion each member the share of the AFCA budget to be funded by the user charge.
- Calculate each member’s user charge amount per complaint (complaint fee at closure point / total complaint fees x member’s share of AFCA budget amount). This provides a percentage proportion for each complaint which is applied to the member’s share of the AFCA budget (step 7).
Illustrative User charge calculation example: Member E
Please note: This is an example only. The figures used do not reflect the actual AFCA budget or complaint fees.
|
AFCA budget to be funded by the user charge (incl GST) |
$10,000 |
|---|
|
Example Complaint fees per closure Point Schedule |
||||||
|---|---|---|---|---|---|---|
|
Closure point |
Registration and referral |
Rules |
Case Management |
Decision |
||
|
Standard / Complex |
Fast Track |
Standard / Complex |
Fast Track |
|||
|
Complaint Fee |
0 |
0 |
200 |
150 |
500 |
250 |
Number of complaints per closure point (Steps 1 and 2) |
|||||||
|---|---|---|---|---|---|---|---|
|
Closure point |
Registration and referral |
Rules |
Case Management |
Decision |
Total complaints |
||
|
Standard / Complex |
Fast Track |
Standard / Complex |
Fast Track |
||||
|
Member A |
1 |
1 |
18 |
0 |
2 |
1 |
23 |
|
Member B |
1 |
0 |
0 |
0 |
0 |
0 |
1 |
|
Member C |
0 |
4 |
37 |
5 |
12 |
2 |
60 |
|
Member D |
0 |
18 |
91 |
0 |
20 |
1 |
130 |
|
Member E |
0 |
1 |
2 |
2 |
0 |
10 |
15 |
|
Member F |
2 |
0 |
3 |
0 |
0 |
0 |
5 |
|
Member G |
0 |
1 |
2 |
0 |
2 |
0 |
5 |
|
Total |
4 |
25 |
153 |
7 |
36 |
14 |
239 |
Net User Charge complaints excluding Registration & Referral, Rules and free complaints (Step 3) |
||||||||
|---|---|---|---|---|---|---|---|---|
|
Closure point |
Registration and referral |
Rules |
Case Management |
Decision |
Total complaints |
Included in User Charge | ||
|
Standard / Complex |
Fast Track |
Standard / Complex |
Fast Track |
|||||
|
Member A |
0 |
0 |
15 |
0 |
1 |
0 |
16 |
Yes |
|
Member B |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
No |
|
Member C |
0 |
0 |
32 |
5 |
12 |
2 |
51 |
Yes |
|
Member D |
0 |
0 |
89 |
0 |
17 |
1 |
107 |
Yes |
|
Member E |
0 |
0 |
1 |
2 |
0 |
6 |
9 |
Yes |
|
Member F |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
No |
|
Member G |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
No |
|
Total |
0 |
0 |
137 |
7 |
30 |
9 |
183 |
|
|
Calculate total complaint fees and percentage share per Member (Steps 4 and 5) |
Step 6 |
Step 7 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
|
Closure point |
Registration and referral |
Rules |
Case Management |
Decision |
Total complaints |
Percentage share of User Charge |
User Charge Amount |
||
|
Standard / Complex |
Fast Track |
Standard / Complex |
Fast Track |
||||||
|
Member A |
$0.00 |
$0.00 |
$3,000.00 |
$0.00 |
$500.00 |
$0.00 |
$3,500.00 |
7.7% |
$765.86 |
|
Member C |
$0.00 |
$0.00 |
$6,400.00 |
$750.00 |
$6,000.00 |
$500.00 |
$13,650.00 |
29.9% |
$2,986.87 |
|
Member D |
$0.00 |
$0.00 |
$17,800.00 |
$0.00 |
$8,500.00 |
$250.00 |
$26,550.00 |
58.1% |
$5,809.63 |
|
Member E |
$0.00 |
$0.00 |
$200.00 |
$300.00 |
$0.00 |
$1,500.00 |
$2,000.00 |
4.4% |
$437.64 |
|
Total |
$0.00 |
$0.00 |
$27,400.00 |
$1,050.00 |
$15,000.00 |
$2,250.00 |
$45,700.00 |
100% |
$10,000.00 |
Note: Members B, F and G have been excluded as they had less than 6 complaints closed past Registration and Referral.
|
Calculate total complaint fees and percentage share per Member (Steps 8 and 9) |
|||||||
|---|---|---|---|---|---|---|---|
|
Closure point |
Registration and referral |
Rules |
Case Management |
Decision |
Total complaints |
||
|
Standard / Complex |
Fast Track |
Standard / Complex |
Fast Track |
||||
|
Member E |
$0.00 |
$0.00 |
$43.76 |
$65.65 |
$0.00 |
$328.23 |
$437.64 |
