James Hardie has cut its annual contribution to a compensation fund set up for asbestos victims by nearly a third following a drop in its free cash flow.

The building products supplier fulfilled its previously flagged commitment to pay 35 per cent of its free cash flow to the Asbestos Injuries Compensation Fund (AICF), but a drop in that cash flow meant the 2014-15 payment was $81.1 million compared to $119.9 million a year earlier.

Claims against James Hardie's asbestos compensation fund declined in the six months to September. Credit:Peter Rae

James Hardie said it has now paid a total $799.2 million to the fund since its inception in 2007.