Social Security Foreign Currency Exchange Rate Determination 2014 (No. 1)

Administered by Department of Social Services

Legislation au F2014L00339 Not in force Legislative Instrument

Legislation content

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)

Overview

The Social Security Foreign Currency Exchange Rate Determination 2014 (No. 1) was enacted to address the need for updating foreign currency exchange rates for social security payments in Australia, particularly in response to geopolitical changes and shifts in currency management. This legislative instrument is made under the authority of subsection 1100(5) of the Social Security Act 1991, which empowers the Secretary to determine the value of payments received in foreign currencies. The primary objective of this determination is to reflect the dissolution of the Netherlands Antilles and the emergence of Curacao and Sint Maarten as autonomous entities within the Kingdom of the Netherlands, necessitating adjustments in the applicable exchange rates. Additionally, it updates the sources for determining the exchange rates for payments by the Istituto Nazionale della Previdenza Sociale (INPS) to align with current practices. This determination revokes the previous Social Security Foreign Currency Exchange Rate Determination 2013 (No. 2) and will come into effect on 1 April 2014, ensuring that the conversion rates are accurate and reflect current economic realities.

Scope and Application

The Social Security Foreign Currency Exchange Rate Determination 2014 (No.1) applies to individuals and entities receiving payments in foreign currencies under the Social Security Act 1991. This includes payments made by various institutions, such as the Commonwealth Bank of Australia, the Reserve Bank of Australia, the Bank of America, and the Central Bank of Bosnia and Herzegovina. It is specifically tailored to adjust the exchange rate methodologies for payments originating from or involving foreign currencies, such as the Netherlands Antillean Guilder, the Euro, and others specified in the Act. The determination applies nationally across Australia and revokes the previous Social Security Foreign Currency Exchange Rate Determination 2013 (No. 2) to update the exchange rate sources in light of geopolitical changes. The Act includes provisions for manual payments and those from the Instituto Nazionale della Previdenza Sociale (INPS), with specific rates defined for these scenarios. The instrument does not contain explicit exclusions or exemptions but outlines specific exchange rates to be used for different currencies and payment types, ensuring a consistent approach to currency conversion for social security payments.

Key Provisions

The Social Security Foreign Currency Exchange Rate Determination 2014 (No.1) (the Determination) outlines the method for calculating the value of foreign currency payments received by individuals under the Social Security Act 1991. The primary sections of the Determination (sections 1.1 to 1.4) cover the name of the Determination, its commencement, definitions, and the revocation of previous Determinations. Sections 2 to 8 specify the exchange rates applicable for various currencies, sourced from institutions such as the Commonwealth Bank of Australia, the Reserve Bank of Australia, the Bank of America, and the Central Bank of Bosnia and Herzegovina. Section 9 addresses the exchange rates for manual payments and payments from the Istituto Nazionale della Previdenza Sociale (INPS). The Determination imposes specific obligations on the parties it governs, primarily focusing on the accurate application of exchange rates for foreign currency payments. It mandates the use of specified exchange rates from authorised sources for converting foreign currency payments into Australian dollars. The Determination also requires that certain payments, such as those from the INPS, use the standard Euro rate provided by the Commonwealth Bank of Australia. Additionally, manual payments must have their exchange rates updated twice a year, aligning with the pension Consumer Price Index (CPI) dates. Breaches of the Determination may result in civil or criminal consequences, depending on the nature and intent of the non-compliance. Although the Determination does not specify maximum penalties, non-compliance with the Social Security Act 1991, which the Determination supports, can lead to fines or other legal actions. For instance, deliberately providing incorrect information could result in civil penalties, while wilful misconduct might incur criminal penalties. The precise penalties would be determined under the overarching Act, considering the severity and circumstances of the breach.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.