Social Security Foreign Currency Exchange Rate Determination 2009

Overview

The Social Security Foreign Currency Exchange Rate Determination 2009 was enacted to specify the methodology for converting foreign currency payments received by individuals into Australian dollars, as stipulated under section 1100 of the Social Security Act 1991. This determination was made by the Secretary under subsection 1100(5) of the Act and it revokes the Social Security Foreign Currency Exchange Rate Determination 2008 (No. 1) along with all amendment determinations made in 2006 and 2007. The primary purpose of this determination is to provide updated exchange rates for the currencies of Slovakia and Gambia, ensuring that the conversion rates are sourced from appropriate and recognised financial institutions. It addresses the need for accurate and timely conversion rates for social security payments received in foreign currencies, thereby ensuring the correct valuation of these payments for beneficiaries. The determination outlines specific sources for exchange rates, including those from the Commonwealth Bank of Australia, the Reserve Bank of Australia, and the Bank of America, among others. This legislative instrument was introduced without consultation as it was considered to be of a minor or machinery nature that did not substantially alter existing arrangements.

Scope and Application

The Social Security Foreign Currency Exchange Rate Determination 2009 applies to individuals and entities receiving payments in foreign currencies under the Social Security Act 1991. It is specifically concerned with the conversion of foreign currency payments into Australian dollars for the purposes of determining eligibility and the amount of social security payments. The geographic reach of this legislation is nationwide as it is a Commonwealth Act, affecting all Australian citizens and residents who receive foreign currency payments and seek to convert them for social security purposes. The Determination excludes certain currencies that have their own specified exchange rates as outlined in Parts 3 to 8, which source rates from various banks and financial institutions. Additionally, Part 9 addresses manual or non-computerised payments, setting specific exchange rates that are updated twice a year. This Determination revokes all previous foreign currency exchange rate determinations made in 2006 and 2007, as well as the Social Security Foreign Currency Exchange Rate Determination 2008 (No. 1). The application of the Act can be further extended or modified through subordinate instruments as deemed necessary by the Secretary or their delegate.

Key Provisions

The main operative sections of the Social Security Foreign Currency Exchange Rate Determination 2009 (the Determination) detail the exchange rates for various currencies as they pertain to payments received in Australia from specified foreign countries. Specifically, section 1.1 provides the name of the Determination, section 1.2 details the commencement date, section 1.3 defines key terms used throughout the document, and section 1.4 revokes all prior determinations related to foreign currency exchange rates under the Social Security Act 1991. Subsequent sections (3-9) specify the source and method for determining the exchange rates for specific currencies and types of payments. The Determination imposes obligations on parties and entities governed by the Social Security Act 1991 to accurately determine the value of foreign currency payments in Australian dollars using the prescribed exchange rates. These obligations are laid out in sections 3 through 8, where each section identifies a specific currency and its corresponding exchange rate source, such as the Commonwealth Bank of Australia or the Bank of America. Additionally, section 9 provides for the exchange rates of manual payments and payments made by the Istituto Nazionale della Previdenza Sociale (INPS), which are updated twice a year on or after the pension CPI dates. The Determination does not explicitly outline offences, penalties, or consequences for breach; however, it is reasonable to infer that non-compliance with the specified exchange rates could result in inaccurate calculations of payments, potentially leading to legal disputes or administrative reviews. The Social Security Act 1991, under which this Determination is made, likely provides for penalties and consequences for incorrect application of exchange rates, although these are not detailed within the Determination itself.