Social Security Foreign Currency Exchange Rate Determination 2014 (No. 2)

Administered by Department of Social Services

Legislation au F2014L01515 Not in force Legislative Instrument

Legislation content

EXPLANATORY  STATEMENT

 

Social Security Foreign Currency Exchange Rate Determination 2014 (No.2)

 

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 2014

(No. 1) made under subsection 1100(5) of the Act.

 

This determination is required so as to remove Lithuania from Table D and add Lithuania to Table A. This change reflects that Lithuania is to adopt the Euro as its currency from 1 January 2015. Their official currency is currently the Litas.

 

The determination will come into effect on 1 January 2015.

 

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.2)

 

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 2014 (No. 1) made under subsection 1100(5) of the Act.

 

This determination is required so as to remove Lithuania from Table D and add Lithuania to Table A to reflect that Lithuania is to adopt the Euro as its currency from 1 January 2015.

 

The determination will come into effect on 1 January 2015.

 

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.2)

Overview

The Social Security Foreign Currency Exchange Rate Determination 2014 (No. 2) was enacted to amend the methodology for determining the value of foreign currency payments under the Social Security Act 1991. This legislative instrument was made under subsection 1100(5) of the Act, which empowers the Secretaries (or their delegates) to provide for the determination of foreign currency exchange rates. This determination was necessitated to reflect the impending adoption of the Euro by Lithuania, which is scheduled for 1 January 2015. Consequently, Lithuania is to be removed from Table D and added to Table A, as it will cease using the Litas as its official currency. The changes outlined in this determination took effect on the same date, 1 January 2015. The instrument was prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, confirming its compatibility with the human rights and freedoms recognised or declared in international instruments.

Scope and Application

The Social Security Foreign Currency Exchange Rate Determination 2014 (No.2) applies to persons who receive payments in foreign currencies under the Social Security Act 1991, particularly those payments that need to be converted to Australian dollars for assessment and payment purposes. This determination impacts both individuals and entities that receive foreign currency payments, such as those from overseas pensions or remittances, and it is particularly relevant to the administrative processes of the Department of Human Services. Geographically, the determination applies across Australia, as it is a national regulation under the Commonwealth's purview. The determination specifies various exchange rates from reputable sources, including the Commonwealth Bank of Australia, Reserve Bank of Australia, and others, to ensure accurate conversion of foreign currency payments into Australian dollars. The determination also includes specific provisions for certain manual payments and payments from institutions such as INPS. Notably, it revokes the previous determination to update the currency exchange rates in response to Lithuania's adoption of the Euro as its official currency from 1 January 2015.

Key Provisions

The key operative sections of the Social Security Foreign Currency Exchange Rate Determination 2014 (No. 2) (the Determination) provide specific mechanisms for determining the value of payments received in foreign currency. Section 1100 of the Social Security Act 1991 (the Act) allows for this determination, and the Determination specifies how the value of such payments should be calculated. This includes identifying the exchange rate sources from various financial institutions and central banks, as outlined in Parts 3 to 8 of the Determination. Part 9 addresses particular types of payments that do not fall under the usual provisions, such as manual payments and those from specific organisations like the Istituto Nazionale della Previdenza Sociale (INPS). The Determination also revokes the previous determination, reflecting the adoption of the Euro by Lithuania and the need to adjust the exchange rate tables accordingly. The Determination imposes specific obligations on the parties involved. It mandates the use of particular exchange rates sourced from the Commonwealth Bank of Australia, Reserve Bank of Australia, Bank of America, and the Central Bank of Bosnia and Herzegovina, among others, to convert foreign currency payments into Australian dollars. These rates are to be applied based on the type of currency and the payment source. Additionally, it sets out the procedures for calculating the value of manual payments and payments from INPS, ensuring that these payments are also appropriately converted using specified rates. The Determination also requires that these rates be updated twice a year, aligning with the pension Consumer Price Index (CPI) dates. Breach of the Determination’s provisions may result in civil or criminal consequences, although the specific offences, penalties, or consequences are not detailed within the Determination itself. Generally, under the Social Security Act 1991, breaches could lead to penalties such as fines or other sanctions, depending on the severity and intent of the breach. For instance, deliberately using incorrect exchange rates could be considered fraudulent behaviour, which might incur criminal penalties. However, the exact penalties are not specified in the Determination and would likely be governed by other sections of the Act or related legislation.

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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.