Insurers over-collected $12.7 million in final Victorian levies
Insurers over-collected $12.7 million in fire services levies (FSL) in the final year of the Victorian charge, FSL Monitor Allan Fels says.
He says the money should be returned to policyholders, and has released guidelines for insurers on how to deal with the issue so there is a “coherent and consistent approach” across the industry.
“The Fire Services Levy Monitor considers that commercial policyholders should not be excluded from refunds of over-collected FSL,” the guidelines say.
Insurers collected the levy during the financial year to June 30 2013, but the exact amount due to the Country Fire Authority (CFA) and Metropolitan Fire Brigade (MFB) from each insurer was not known until after the end of the year.
This meant insurers could under-collect or over-collect.
The guidelines say the fire services may be considered as a whole rather than separate entities, so that over-collection of CFA levies can be offset against under-collection for the MFB.
Refunds should be proportionate to the FSL paid by policyholders, and insurers should also refund amounts equivalent to the GST and stamp duty on the refunded FSL.
The Australian Taxation Office and Victorian State Revenue Office have given advice on adjustments for stamp duty and GST liability.
If an insurer can show it cannot determine the amount or who to pay, the monitor will agree to payments to organisations that represent Victorian insurance consumers.
These include the Consumer Action Law Centre, Good Shepherd Microfinance, Footscray Community Legal Centre, the Brotherhood of St Laurence and a Uniting Church group.