EXPLANATORY STATEMENT
Social Security Foreign Currency Exchange Rate Determination 2014 (No.1)
Purpose
Section 1100 of the Social Security Act 1991 (the Act) allows Secretaries (or their delegates) to provide for how the value of a payment received by a person in a foreign currency is to be determined.
This determination is made under subsection 1100(5) of the Act and it revokes the Social Security Foreign Currency Exchange Rate Determination 2013 (No. 2) made under subsection 1100(5) of the Act.
This determination is required so as to remove the Netherlands Antilles from Table B and add Curacao and Sint Maarten to Table B. This change reflects that the Netherlands Antilles was dissolved on 10 October 2010 and Curacao and Sint Maarten became autonomous countries of the Kingdom of Netherlands. Their official currency is currently the Netherlands Antillean Guilder.
This determination is also required so as to remove Division 3 which refers to payments by the Istituto Nazionale della Previdenza Sociale (INPS).
The Instituto Centrale delle Banche Popolari ceased handling INPS payments from March 2012 and therefore stopped providing the actual exchange rate used by that bank to convert INPS payments.
The standard Euro rate provided by the Commonwealth Bank of Australia is to be used for INPS payments.
The determination will come into effect on 1 April 2014.
Background
The determination specifies various sources where an amount received in a foreign currency can have an appropriate market exchange rate applied to that currency in order to convert it to Australian dollars.
The sources are:
• the buying rate from the Commonwealth Bank of Australia (Part 3, Table A);
• the miscellaneous exchange rate from the Commonwealth Bank of Australia (Part 4, Table B);
• the international money transfer rate from the Commonwealth Bank of Australia (Part 5, Table C);
o the Reserve Bank of Australia rate from the Reserve Bank of Australia (Part 6, Table D);
o the Bank of America rate from the Bank of America (Part 7, Table E); and
o the Central Bank of Bosnia and Herzegovina rate from the Central Bank of Bosnia and Herzegovina (Part 8).
The determination provides that amounts received by a person in Australia from specified foreign countries are sourced from one of the Parts mentioned above to determine the appropriate market exchange rate to be applied.
Part 9 of the determination provides for some other types of payments to which subsection 1100(2) of the Act does not apply.
The payments affected by Part 9 are made manually or without using a computer system with their exchange rate updated twice a year on or after the pension CPI dates (20 March and 20 September). In addition the exchange rate of payments made by the lstituto Nazionale della Previdenza Sociale (INPS) and available from the lstituto Centrale delle Sanche Popolari ltaliane in Milan are also provided for in Part 9.
Consultation
No consultation in relation to the determination was undertaken because this legislative instrument is of a minor or machinery nature that does not substantially alter existing arrangements.
Explanation of the provisions
Part 1 of the determination provides for the preliminary requirements, namely, the name of the determination (section 1.1), commencement (section 1.2), definitions (section 1.3) and revocation of all existing determinations (section 1.4).
Part 2 of the determination provides that subsection 1100(2) of the Act does not apply to the identified currencies in Part 3, 4, 5, 6, 7 and 8.
Part 3 of the determination provides for the exchange rate available from the buying rate at the Commonwealth Bank of Australia.
Part 4 of the determination provides for the exchange rate available from the miscellaneous exchange rate at the Commonwealth Bank of Australia.
Part 5 of the determination provides for the exchange rate available from the international money transfer rate at the Commonwealth Bank of Australia.
Part 6 of the determination provides for the exchange rate available from the Reserve Bank of Australia.
Part 7 of the determination provides for the exchange rate available from the Bank of America.
Part 8 of the determination provides for the exchange rate available from the Central Bank of Bosnia and Herzegovina.
Part 9 of the determination provides for the exchange rate for manual payments and also for INPS payments.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security Foreign Currency Exchange Rate Determination 2014 (No.1)
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
Section 1100 of the Social Security Act 1991 (the Act) allows Secretaries (or their delegates) to provide for how the value of a payment received by a person in a foreign currency is to be determined.
This determination is made under subsection 1100(5) of the Act and it revokes the Social Security Foreign Currency Exchange Rate Determination 2013 (No. 2) made under subsection 1100(5) of the Act.
This determination is required so as to remove the Netherlands Antilles from Table B and add Curacao and Sint Maarten to Table B to reflect that Curacao and Sint Maarten became autonomous countries of the Kingdom of the Netherlands with the Netherlands Antillean Guilder as their currency. The determination will come into effect on 1 April 2014.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Social Security Foreign Currency Exchange Rate Determination 2014 (No.1)