ASIC Credit (Financial Counselling Agencies) Instrument 2015/992

Administered by Department of the Treasury

Legislation au F2015L01743 Not in force Legislative Instrument

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ASIC Corporations (Amendment) Instrument 2015/991

ASIC Credit (Financial Counselling Agencies) Instrument 2015/992

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

National Consumer Credit Protection Act 2009

 

The Australian Securities and Investments Commission (ASIC) makes:

  •  the ASIC Corporations (Amendment) Instrument 2015/991 under paragraph 911A(2)(l) of the Corporations Act 2001 (the Corporations Act). Paragraph 911A(2)(l) provides that ASIC may exempt a person from the requirement to hold an Australian financial services (AFS) licence.
  •  the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 under paragraph 109(3)(d) of the National Consumer Credit Protection Act 2009 (the National Credit Act). Paragraph 109(3)(d) provides that ASIC may declare that provisions to which Part 2-6 of the National Credit Act applies apply in relation to a class of persons as if specified provisions were modified or varied.

 

  1.                                             Background

Existing exemptions

Financial counselling agencies, and persons who provide financial counselling services as representatives of financial counselling agencies, are exempt from:

  • the requirement in the Corporations Act to hold an AFS licence covering the provision of a limited range of financial services offered as part of a financial counselling service – this exemption is contained in ASIC Class Order [CO 03/1063]; and
  • the requirement in the National Credit Act to hold an Australian credit licence (credit licence) in relation to credit activities provided as part of a financial counselling service- this exemption is contained in subregulation 20(5) of the National Consumer Credit Protection Regulations 2010 (National Credit Regulations).

These exemptions only apply where no fees or charges (however described) are payable by or on behalf of the client in relation to the financial service or credit activity or any other aspect of the financial counselling service.

Financial counselling requirements under statutory schemes for payment of benefits

The Commonwealth Government has recently put in place a statutory scheme (the BSWAT Payment Scheme) for payment of a lump sum to eligible persons under the Business Services Wage Assessment Tool Payment Scheme Act 2015 (the BSWAT Payment Scheme Act).

An essential part of the BSWAT Payment Scheme is for eligible persons to only be able to accept the offer of a lump sum under the scheme after receiving both legal advice and financial counselling. In relation to the financial counselling requirement, the BSWAT Payment Scheme Act provides for:

  • a register of financial counsellors (registered advisers) who will be available to provide financial counselling certificates for the purpose of the scheme; and
  • registered advisers to make a claim to the Department of Social Services (the Department) for a service fee, up to a maximum of $435, in relation to each financial counselling certificate. Paragraph 98A(1)(a) of the BSWAT Payment Scheme Act provides that the service fee is payable ‘in discharge of costs, expenses or other obligations incurred by a person’ in connection with obtaining a financial counselling certificate.

The fee payable to the registered adviser will be assessed by the Secretary of the Department to determine whether it is appropriate for the level of work undertaken in providing the financial counselling service. Payment of the fee is not dependent on the decision of the eligible person, and will be payable regardless of whether the eligible person decides to accept the lump sum offer.

The financial counselling requirement, and Commonwealth funding for these services, is a control included in the terms of the BSWAT Payment Scheme to increase the choices of the scheme’s target group (consumers who are vulnerable because of intellectual disability). For additional information see the Explanatory Statement to the Business Services Wage Assessment Tool Payment Scheme Bill 2014.

The ability of financial counselling agencies to rely on the existing licensing exemptions may be adversely affected by participating in the BSWAT Payment Scheme as a registered adviser and receiving a service fee.

 

2.                                                Purpose of the instrument

The purpose of the ASIC Corporations (Amendment) Instrument 2015/991 and the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 is to modify the limitation in the existing exemptions on fees or charges payable on behalf of the client in relation to a financial counselling service.

The modifications will permit fees or charges that are payable on behalf of the client by the Commonwealth, a State or a Territory.

These modifications will permit a fee or charge to be payable on behalf of the client to implement the Government’s decision to include a Commonwealth funded financial counselling requirement as a consumer protection measure for the BSWAT Payment Scheme. Without this variation financial counsellors and agencies that participate in that scheme would lose the benefit of the existing exemptions, which may discourage participation in the BSWAT Payment Scheme.

Allowing for a service fee that is payable by the Commonwealth or a State or Territory, and that is not dependent on the client’s decisions, is unlikely to result in financial counsellors and agencies being subject to a conflict of interest.

 

3.                                                Operation of the instrument

Paragraph (c) of [CO 03/1063] requires that no fees or charges be payable by or on behalf of the client in relation to the financial service or any other aspect of the financial counselling service in order for the relevant licensing exemption to apply. Schedule 1 of the ASIC Corporations (Amendment) Instrument 2015/991 amends paragraph (c) of  [CO 03/1063] to permit fees or charges that are payable by the Commonwealth, a State or a Territory.

Paragraph 20(5)(e) of the National Credit Regulations requires that no fees or charges be payable by or on behalf of the client in relation to the credit activity or any other aspect of the financial counselling service in order for the licensing exemption in subregulation 20(5) to apply. Section 5 of the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 modifies paragraph 20(5)(e) of the National Credit Regulations to permit fees or charges that are payable by the Commonwealth, a State or a Territory.

 

4.                                                Consultation

Before making the legislative instruments, ASIC consulted with the Financial Counselling Association of Australia, together with the Department of Social Security as the Department responsible for the BSWAT Payment Scheme. ASIC considered that this level of consultation was appropriate given the limited extensions to the existing licensing exemptions for financial counselling services.

The Office of Best Practice Regulation advised that a RIS is not required in order to make the legislative instruments.

 

Overview

The ASIC Corporations (Amendment) Instrument 2015/991 and the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 were enacted to address a gap in existing exemptions for financial counselling agencies under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009. These instruments were made by the Australian Securities and Investments Commission (ASIC) to align with the Government's initiative to include a Commonwealth funded financial counselling requirement as a consumer protection measure for the Business Services Wage Assessment Tool Payment Scheme. The policy objective is to allow financial counselling agencies to participate in the scheme and receive a service fee from the Commonwealth, a State, or a Territory, without losing the benefit of the existing licensing exemptions. This modification ensures that financial counsellors and agencies are not discouraged from participating in the BSWAT Payment Scheme due to potential conflicts of interest. The existing exemptions for financial counselling agencies exempt them from holding an Australian financial services (AFS) licence and an Australian credit licence under specific conditions, primarily that no fees or charges are payable by or on behalf of the client. The new instruments modify these exemptions to permit fees or charges payable by the Commonwealth, a State, or a Territory, provided that these fees are not dependent on the client's decisions. This change supports the Government's aim to enhance the choices for vulnerable consumers, such as those with intellectual disabilities, by ensuring that financial counselling services remain accessible under the BSWAT Payment Scheme.

Scope and Application

The ASIC Corporations (Amendment) Instrument 2015/991 and the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 are legislative instruments made by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009, respectively. These instruments modify existing exemptions for financial counselling agencies from certain licensing requirements under both the Corporations Act and the National Credit Act. Specifically, the amendments allow financial counselling agencies to accept fees or charges on behalf of clients if such fees are paid by the Commonwealth, a State, or a Territory. These modifications were made to accommodate the Business Services Wage Assessment Tool Payment Scheme (BSWAT Payment Scheme), which requires eligible individuals to receive financial counselling as part of the process for receiving a lump sum payment. The amendments permit the Commonwealth, States, or Territories to pay a service fee to financial counsellors for providing these services without removing the existing licensing exemptions. This ensures that financial counselling agencies can participate in the BSWAT Payment Scheme without facing the potential loss of their exemptions, thereby maintaining the integrity of the scheme's consumer protection measures.

Key Provisions

The main operative sections of the ASIC Corporations (Amendment) Instrument 2015/991 and the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 modify existing exemptions that prevent financial counselling agencies and their representatives from holding an Australian Financial Services (AFS) licence or Australian Credit Licence (credit licence) when no fees or charges are payable by or on behalf of the client. Specifically, Schedule 1 of the ASIC Corporations (Amendment) Instrument 2015/991 modifies paragraph (c) of ASIC Class Order [CO 03/1063] to allow fees or charges payable by the Commonwealth, a state, or a territory, while the ASIC Credit (Financial Counselling Agencies) Instrument 2015/992 modifies paragraph 20(5)(e) of the National Consumer Credit Protection Regulations 2010 to permit fees or charges payable by the Commonwealth, a state, or a territory. These changes are in response to the Commonwealth's Business Services Wage Assessment Tool Payment Scheme, which requires financial counselling services and permits a service fee to be paid by the Commonwealth. These legislative instruments impose obligations on financial counselling agencies and their representatives to ensure compliance with the Corporations Act and the National Consumer Credit Protection Act. They must ensure that any fees or charges payable by or on behalf of the client are only those payable by the Commonwealth, a state, or a territory and are not dependent on the client's decisions. Furthermore, financial counselling agencies must adhere to the requirements of the Business Services Wage Assessment Tool Payment Scheme, including registering as a financial counsellor and making claims for service fees to the Department of Social Services. Failure to comply with the requirements of these legislative instruments may result in various consequences. Under the Corporations Act, unauthorised financial services may lead to civil penalties, including fines of up to $275,000 for individuals and $1.35 million for bodies corporate. Additionally, under the National Consumer Credit Protection Act, unauthorised credit activities may result in civil penalties of up to $275,000 for individuals and $1.35 million for bodies corporate. Furthermore, the Australian Securities and Investments Commission (ASIC) may take enforcement action, such as seeking injunctions, compensation orders, or banning individuals or entities from providing financial services or acting as a financial counsellor. These legislative instruments provide a framework for financial counselling agencies and their representatives to operate within the parameters of the Corporations Act and the National Consumer Credit Protection Act while participating in the Business Services Wage Assessment Tool Payment Scheme.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.