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 threshold at which the user charge applies has increased from two or more complaints to six or more complaints. Members who have less than six complaints closed in the most recent financial year do not incur a user charge.

Proportion

Under AFCA's previous funding model, the user charge accounted for approximately 8% of AFCA’s revenue. Under the new model, a more balanced revenue structure is achieved by increasing the proportion from user charge fees, while significantly reducing complaint fees. This provides both AFCA and members with greater budget certainty and forecasting.

Each year, AFCA will be targeting 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

Following the funding model consultation, AFCA introduced the option for progressive invoicing for members with a user charge over a certain threshold. 

Members with a user charge of over $25,000 will be automatically invoiced monthly, however, these members can opt to receive their user charge invoices quarterly, bi-annually or annually.

User charge calculation steps

  1. Identify the number of complaints closed for each member in the year.
  2. 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.
  3. 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.
  4. Calculate the total complaint fees to each Member for the year.
  5. Calculate the total amount of complaint fees for the year.
  6. 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.
  7. Use the percentage share (from step 6) to apportion each member the share of the AFCA budget to be funded by the user charge.
  8. 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)
  9. Provide each member incurring a user charge a list of all the complaints counted in steps 1 to 3. The list includes the user charge amount per complaint based on its closure point.

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

7.0%

$702.81

Member C

$0.00

$0.00

$7,400.00

$750.00

$6,000.00

$500.00

$14,650.00

29.4%

$2,941.77

Member D

$0.00

$0.00

$18,200.00

$0.00

$10,000.00

$250.00

$28,450.00

57.1%

$5,712.85

Member E

$0.00

$0.00

$400.00

$300.00

$0.00

$2,500.00

$3,200.00

6.4%

$642.57

Total

$0.00

$0.00

$29,000.00

$1,050.00

$16,500.00

$3,250.00

$49,800.00

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

$80.32

$60.24

$0.00

$502.01

$642.57

 

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