Overview

The Social Security Foreign Currency Exchange Rate Determination 2011 (No.1) was enacted to address the need for a standardised method of converting foreign currency payments into Australian dollars for social security recipients. This determination was made under subsection 1100(5) of the Social Security Act 1991 and revokes the Social Security Foreign Currency Exchange Rate Determination 2010 (No. 1). The determination was required to incorporate new countries, including Benin, Burkina Faso, Cameroon, Chad, Equatorial Guinea, Guinea-Bissau, Mali, Niger, and Senegal, into the existing framework for determining exchange rates. The policy objective is to ensure consistency and fairness in the conversion rates used for social security payments received in foreign currencies, thereby providing clarity and reliability to those affected. The determination specifies various sources for exchange rates, such as the Commonwealth Bank of Australia, Reserve Bank of Australia, Bank of America, and others, to apply appropriate market exchange rates. Additionally, it addresses manual or non-computerised payments, updating their exchange rates twice a year on or after the pension CPI dates.

Scope and Application

The Social Security Foreign Currency Exchange Rate Determination 2011 (No.1) applies to the conversion of foreign currency payments into Australian dollars for the purposes of determining benefits and payments under the Social Security Act 1991. The Act is applicable to individuals receiving payments in foreign currencies from specified countries and entities such as banks and financial institutions that facilitate these currency conversions. The specified countries include Benin, Burkina Faso, Cameroon, Chad, Equatorial Guinea, Guinea-Bissau, Mali, Niger, and Senegal. The exchange rates are sourced from various financial institutions, including the Commonwealth Bank of Australia, Reserve Bank of Australia, Bank of America, and others, to ensure accurate conversion rates. The geographic reach of the Act is national, encompassing all of Australia, as it governs the conversion of foreign currency payments into Australian dollars for social security purposes. The determination revokes the previous Social Security Foreign Currency Exchange Rate Determination 2010 (No. 1) and includes additional countries from 1 July 2011. The application of the Act may be extended or restricted through subordinate instruments, although no specific extensions or restrictions are mentioned in the explanatory statement.

Key Provisions

The Social Security Foreign Currency Exchange Rate Determination 2011 (No. 1) outlines the specific sources from which foreign currency exchange rates will be obtained to convert payments into Australian dollars. This is in accordance with section 1100 of the Social Security Act 1991 (section 1100(5)). The primary sources for these exchange rates include the on-demand airmail buying rate from the Commonwealth Bank of Australia (section 3.1), miscellaneous exchange rate from the Commonwealth Bank of Australia (section 4.1), telegraphic transfer rate from the Commonwealth Bank of Australia (section 5.1), Reserve Bank of Australia rate from the Reserve Bank of Australia (section 6.1), Bank of America rate from the Bank of America (section 7.1), and the Central Bank of Bosnia and Herzegovina rate from the Central Bank of Bosnia and Herzegovina (section 8.1). This determination applies to amounts received by a person in Australia from specified foreign countries. The obligations imposed by this Act include the requirement for Secretaries, or their delegates, to ensure that the appropriate market exchange rate is applied to payments received in foreign currency by individuals in Australia. The Act also mandates the use of specific exchange rate sources for different types of payments, ensuring that the rates are applied consistently and accurately across various currencies. Additionally, manual payments and payments made by the Istituto Nazionale della Previdenza Sociale (INPS) have specific requirements, with their exchange rates updated twice a year on or after the pension CPI dates (20 March and 20 September). For breaches of this Act, there are no specific offences or penalties outlined within the text. However, failure to comply with the requirements of the Act could potentially result in civil or administrative consequences, such as the invalidation of payments or financial penalties. It is important to note that while the determination itself does not specify maximum penalties, any associated breach of the Social Security Act 1991 may have its own set of penalties and consequences.