Overview

The Social Security Foreign Currency Exchange Rate Determination 2009 (No.2) was enacted to address the need for a comprehensive method of determining the exchange rates for foreign currencies in the context of social security payments, as required by Section 1100 of the Social Security Act 1991. This determination was introduced to replace the previous Social Security Foreign Currency Exchange Rate Determination 2009 (No. 1) and other amendment determinations made in 2006, 2007, and 2008. It was created to ensure that payments received in various foreign currencies are accurately converted to Australian dollars, including the currencies of Kosovo, Falkland Islands, Saint Helena, and others specified in the legislation. The objective of this determination is to provide a consistent and reliable method for applying appropriate market exchange rates to foreign currency payments, sourced from reputable financial institutions such as the Commonwealth Bank of Australia, the Reserve Bank of Australia, and the Bank of America. The determination was enacted by the Australian Government under the authority of the Social Security Act 1991 and aims to streamline the process of converting foreign currency payments into Australian dollars for social security purposes.

Scope and Application

The Social Security Foreign Currency Exchange Rate Determination 2009 (No. 2) applies to individuals or entities receiving payments in foreign currencies from specific countries, which are then converted to Australian dollars for the purposes of determining the value of social security payments under the Social Security Act 1991. The currencies included in this determination encompass those of Kosovo, Falkland Islands, Saint Helena, Aruba, Cape Verde, Comoros, Eritrea, Lesotho, Liberia, Namibia, Sao Tome and Principe, Sierra Leone, and Bosnia and Herzegovina, among others. The instrument specifies various exchange rate sources, including the Commonwealth Bank of Australia, the Reserve Bank of Australia, and the Bank of America, among others, to ensure that the appropriate market exchange rate is applied. The Determination revokes all previous instruments concerning foreign currency exchange rates for social security purposes. Additionally, it provides specific provisions for manual payments and payments made by the Istituto Nazionale della Previdenza Sociale (INPS), which are updated twice a year. This determination applies nationwide within Australia and extends to any social security payments made in the specified foreign currencies.

Key Provisions

The main operative sections of the Social Security Foreign Currency Exchange Rate Determination 2009 (No.2) (the Determination) are outlined in Parts 3 through 8, which specify the sources from which exchange rates can be obtained for various foreign currencies. Section 1.1 names the determination, section 1.2 details the commencement date, section 1.3 provides definitions, and section 1.4 revokes all previous determinations (sections 1.1 to 1.4). Part 3 specifies the exchange rate from the on-demand airmail buying rate at the Commonwealth Bank of Australia, while Part 4 details the miscellaneous exchange rate from the same bank. Part 5 outlines the telegraphic transfer rate, Part 6 references the Reserve Bank of Australia rate, Part 7 covers the Bank of America rate, and Part 8 provides for the Central Bank of Bosnia and Herzegovina rate. Part 9 deals with manual payments and those made by the Istituto Nazionale della Previdenza Sociale (INPS). The obligations and requirements imposed by the Determination are primarily concerned with ensuring that payments received in foreign currencies are accurately converted to Australian dollars. Under section 1100 of the Social Security Act 1991, the Secretary (or their delegate) must provide for the determination of the value of these payments. The Determination mandates the use of specified exchange rates from reliable financial institutions and banks, ensuring consistency and fairness in the conversion process. Additionally, it revokes all prior determinations to streamline and update the exchange rate sources. The Determination also includes specific provisions for manual payments and those made by INPS, which are subject to less frequent updates (twice a year on or after the pension CPI dates of 20 March and 20 September). This ensures that these payments are still subject to a fair and consistent exchange rate conversion, despite their less frequent updates. The Act does not explicitly outline offences, penalties, or consequences for breaches within the Determination itself. However, breaches of the Social Security Act 1991, under which this Determination is made, could lead to civil or criminal penalties. These could include fines or imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined in the context of the broader Social Security Act, but the Determination ensures that the conversion of foreign currency payments is conducted according to the specified rates and sources to avoid any potential legal repercussions.