Social Security (Foreign Currency Exchange Rate) Determination 2017

This instrument, the Social Security (Foreign Currency Exchange Rate) Determination 2017 (the Determination), fixes how amounts received in specified foreign currencies are valued in Australian currency for the purposes of certain provisions of the Social Security Act 1991 (the Act). It is made under subsection 1100(5) of the Act (see s 3). The Determination performs three mechanical tasks.

First, it designates a list of foreign currencies to which subsection 1100(2) of the Act does not apply (s 6 and Schedule 1). That means, for amounts received in any currency listed in Schedule 1, subsection 1100(2) is not “appropriate” to apply for the purposes of paragraph 1100(2)(a) of the Act (s 6). The instrument therefore removes or narrows the application of that subsection in respect of those currencies; its effect is confined to the statutory context of paragraph 1100(2)(a) as stated.

Second, it prescribes how the value, in Australian currency, of amounts received in those specified currencies are to be calculated for the purposes of subsection 1100(4) of the Act. The valuation method is to use an “appropriate rate of exchange” on the relevant calculation day (s 7).

Third, the Determination defines the term “appropriate rate of exchange” and sets a hierarchy of sources for that rate (s 5). The hierarchy prioritises, in this order: (a) a daily foreign cheques buying rate published by the Commonwealth Bank of Australia (CBA); (b) a daily international money transfer buying rate published by the CBA; (c) a weekly miscellaneous exchange rate published by the CBA; (d) a rate available at the Reserve Bank of Australia (RBA); and (e) where none of (a)-(d) are available, either the rate available at the central bank of the currency or a rate determined by the Secretary for the purposes of subparagraph 1100(3)(b)(ii) of the Act (s 5, paragraphs (a)-(e)). The relevant time for consulting those sources is “at the start of business in Sydney on the fifth business day before the calculation day” (s 5). The instrument also adopts the Act’s definitions of “business day” and “calculation day” by reference to subsection 1100(6) (s 5).

The Determination commences on the day after the instrument is registered (s 2). It was signed by Noel Rossiter, delegate of the Secretary of the Department of Human Services, and expressly repeals the earlier Social Security Foreign Currency Exchange Rate Determination 2014 (No.2) (Schedule 2).

In short, the Determination sets a list of currencies, prescribes a conversion methodology and source-hierarchy for valuing amounts in those currencies for s 1100 purposes, and provides a fallback to central bank rates or a Secretary-determined rate where published bank or RBA rates are not available.

The Determination is short and conceptually narrow. Its operative concepts are drawn from its definitions and the cross-references to the Act. The key technical concepts, as defined or used in the instrument, are:

• “Appropriate rate of exchange” (s 5). The term is defined as a hierarchical selection of published rates relevant to an amount in a foreign currency on a particular calculation day. The hierarchy is explicit and ordinal: the daily foreign cheques buying rate at the CBA is the first preference, then the daily international money transfer buying rate at the CBA, then a weekly miscellaneous exchange rate at the CBA, then a rate at the RBA, and finally either a rate at the currency’s central bank or a rate determined by the Secretary for the purposes of subparagraph 1100(3)(b)(ii) of the Act (s 5(a)-(e)). The timing for reading those sources is specified as “at the start of business in Sydney on the fifth business day before the calculation day” (s 5).

• “Calculation day” and “business day” (s 5). The Determination does not create new definitions for these terms; instead it adopts the meanings given in subsection 1100(6) of the Act (s 5). That ties the Determination’s operation directly into the Act’s time definitions and therefore into the Act’s mechanics for assessment or valuation events.

• Exclusion of subsection 1100(2) (s 6). For the specific listed currencies in Schedule 1, the Determination declares that it is “not appropriate” for subsection 1100(2) of the Act to apply for the purposes of paragraph 1100(2)(a). The instrument thereby narrows the provision’s application in a defined set of cases.

• Valuation for subsection 1100(4) (s 7). The instrument directs that for amounts in currencies to which s 6 applies, the value in Australian currency on a calculation day is to be calculated using the “appropriate rate of exchange” for that amount on that day.

• Schedule mechanics. Schedule 1 lists 137 specified foreign currencies by name; Schedule 2 repeals the 2014 Determination in full (Schedule 2). Section 4 makes clear that instruments specified in a Schedule are amended or repealed as set out (s 4).

Operationally, the Determination ties statutory valuation to published exchange rate sources and to a fixed point in time (start of business in Sydney, five business days before the calculation day). It also creates a Secretary-level fallback where published rates are unavailable (s 5(e)(ii)). That combination converts what might otherwise be an open-ended valuation discretion into a hierarchical, source-based methodology, with a built-in final fallback to administrative determination.

The Determination expressly addresses valuation for the purposes of provisions in the Social Security Act 1991 (see s 3, referencing subsection 1100(5)). Its immediate legal effect is therefore on any statutory assessment, means test or other operation within the Act that depends on the valuation rules in paragraph 1100(2)(a) and subsection 1100(4). The instrument does not itself name benefit categories, claimants, or third parties; the link to the practical cohort is only through the Act. The text, however, allows the following source-grounded observations.

• Persons, payments or assets that require conversion for the purposes of paragraph 1100(2)(a) and subsection 1100(4). Where the Act requires amounts received in foreign currency to be considered under those paragraphs and subsections, and where those amounts are denominated in any of the currencies listed in Schedule 1, the Determination governs how those amounts are valued (s 6-7). The instrument therefore affects any person, estate or entity whose entitlement, liability, assessment or reporting under the Act turns on the Australian dollar value of foreign-currency amounts listed in Schedule 1.

• Administrative decision-makers within the Department of Human Services. The Determination constrains departmental officers to use the specified sources and timing when converting values for affected currencies, unless the Secretary issues a rate under s 5(e)(ii). The instrument is made by a delegate of the Secretary (signed by Noel Rossiter), and the Secretary retains a residual power to determine rates under the definition (s 3; s 5(e)(ii)). That creates a decision-making role for the Secretary where published rates are absent.

• Financial intermediaries and advisers. Banks, accountants and other advisers who assist claimants in preparing evidence or representations for the Act will be affected in practice, because the Determination prescribes the particular published rates and timing that the Department will use for valuation (s 5). Those advisors will need to know which published CBA or RBA rates or central bank rates will be treated as authoritative for a given calculation day.

• The Commonwealth Bank of Australia and Reserve Bank of Australia. The Determination explicitly relies on CBA and RBA published rates as preferred sources (s 5(a)-(d)). Those institutions’ published rates become, in effect, the operational inputs for a statutory valuation rule. The instrument therefore makes the availability and formats of those publications relevant to the administration of the Act.

The Determination does not create freestanding duties or civil rights outside the Act; instead it modifies how certain duties and rights under the Act are operationalised. The instrument imposes procedural obligations on administrative actors and establishes sources that effectively bind Departmental valuations. The main operative duties and entitlements are these.

• Duty to use the appropriate rate of exchange for valuation (s 7). For amounts in currencies listed in Schedule 1, the valuation of the amount in Australian currency on a calculation day is to be calculated using the “appropriate rate of exchange” for that amount on that day (s 7). That is a mandatory prescription for the valuation step required by subsection 1100(4) of the Act.

• Duty to follow the source-hierarchy when selecting the rate (s 5). The “appropriate rate” is to be determined by reference to the ordered list in s 5(a)-(e). Where an earlier-listed source was available “at the start of business in Sydney on the fifth business day before the calculation day”, that rate is to be used. The hierarchy therefore places a duty on the administering officers to check, in order, each of the specified sources at that specific time point.

• Secretary’s residual right to determine a rate (s 5(e)(ii)). Where the specified published rates are not available, the right (or power) exists for the Secretary to determine the rate for the purposes of subparagraph 1100(3)(b)(ii) of the Act (s 5(e)(ii)). That is framed as part of the definition of “appropriate rate of exchange”, so the Secretary’s determination operates as a permissible source of the conversion rate in the last-resort scenario.

• Right to certainty through published bank or RBA rates. The Determination grants an administrative right,practical, not personal,to rely on the CBA and RBA rates listed in the hierarchy as determinative inputs for valuation, provided those rates are available at the specified time (s 5(a)-(d)). For affected parties, that means the Department will base its currency-to-Australian-dollar conversions on those public sources rather than on ad hoc market quotes sourced elsewhere.

• Duty to observe timing rules (s 5). The timing rule , “at the start of business in Sydney on the fifth business day before the calculation day” , is a precise temporal duty for the selection of published rates. The administering body must adhere to that specific temporal point in retrieving rates. Because the Determination adopts the Act’s definitions of “business day” and “calculation day” (s 5), the duty to observe timing is integrated with the Act’s temporal framework.

The Determination does not itself prescribe penalties, sanctions or enforcement mechanisms. Its statutory function is to specify valuation methodology and sources for use under the Social Security Act 1991; it does not create criminal or civil offences, nor does it set out administrative penalties. The instrument’s silence on penalties means enforcement will occur, if at all, through the Act’s existing compliance, review and enforcement architecture, which the Determination references but does not replicate.

Because the Determination operates by reference to the Act , it is made under subsection 1100(5) of the Act (s 3) and it affects the application of subsection 1100(2) and subsection 1100(4) (ss 6-7) , any consequences for non-compliance with valuation requirements would proceed under the legal and procedural mechanisms the Act provides. The Determination does not state those mechanisms or transform them; it simply supplies the exchange-rate inputs and timing for the statutory valuation tasks under the Act.

On enforcement of the Determination’s directives within administrative practice, the most direct practical enforcement is the Department’s obligation to use the specified sources and timing when converting foreign-currency amounts for affected cases (s 5-7). Where the Department fails to follow the Determination and that failure affects an applicant or recipient’s assessment, the affected person’s remedies, if any, would be those available under the Act and general administrative law (for review of departmental decisions). The instrument itself does not establish an administrative penalty for using an incorrect rate, nor does it create a private cause of action.

Two practical points follow from the instrument’s design:

• The Determination places a burden on departmental administrators to document the chosen source and the timing used for conversion; such documentation would be the basis for the Department to justify its valuation in any internal review or external challenge. The instrument requires selection according to the hierarchical list and the fixed date/time for availability (s 5).

• Where preferred published rates are not available and the Secretary issues a rate under s 5(e)(ii), the Secretary’s determination will be the operative input. The Determination gives the Secretary that power, but does not prescribe procedural constraints on exercising it; any accountability or review mechanisms for such a determination would derive from the Act and administrative law rather than from the Determination itself.

The Determination is explicitly linked to the Social Security Act 1991. It is made under subsection 1100(5) of the Act (s 3) and it alters the application of subsection 1100(2) and subsection 1100(4) for specified foreign currencies (ss 6-7). Several specific intersections with statutory or administrative sources are built into the instrument.

• Direct interaction with the Social Security Act 1991. The Determination operates only for the purposes specified in the Act. Section 6 states that, “For the purposes of paragraph 1100(2)(a) of the Act, it is not appropriate for subsection 1100(2) of the Act to apply in respect of an amount received in a foreign currency that is specified in the table in Schedule 1.” Section 7 provides that “For the purposes of subsection 1100(4) of the Act, the value, on a calculation day, in Australian currency of an amount received in a foreign currency in respect of which section 6 applies is to be calculated using the appropriate rate of exchange for that amount on that day.” The Determination therefore modifies, in practical terms, how provisions of the Act are to be implemented for the listed currencies.

• Reliance on published rates from financial institutions. The definition of “appropriate rate of exchange” depends on published rates from the Commonwealth Bank of Australia and the Reserve Bank of Australia (s 5). That creates an operational interface between the Act’s valuation machinery and the statutory instrument and publications of those institutions. Although the Determination is not a financial law instrument, its operation depends on the continued publication and availability of those banks’ rate tables in the specified formats and at the specified times.

• Interaction with foreign central banks. Where CBA and RBA rates are not available, the Determination permits the use of a rate available at the central bank for the currency “at the start of business for that central bank on the fifth business day before the calculation day” (s 5(e)(i)). That provision links the Determination to the practices and published materials of foreign central banks and imports their timing and rate conventions into the Act’s valuation.

• Secretary discretion under the Act. The definition in s 5(e)(ii) allows the Secretary to determine a rate “for the purposes of subparagraph 1100(3)(b)(ii) of the Act.” That cross-reference to a specific subparagraph in the Act makes the Secretary’s exercise of rate-making power part of the statutory machinery. The Determination does not expand or limit other statutory powers in the Act beyond specifying that the Secretary may supply a rate as a last resort.

The instrument itself includes only limited material on amendment history. What the text explicitly records is:

• The Determination was made and signed on 13 December 2017 by Noel Rossiter as a delegate of the Secretary of the Department of Human Services (front matter). Section 2 prescribes commencement: the whole instrument commences the day after registration (s 2(1) and the commencement table). The instrument contains a note that the commencement table relates only to the provisions as originally made and will not be amended to reflect later amendments (s 2, table note).

• Schedule 2 repeals the earlier Social Security Foreign Currency Exchange Rate Determination 2014 (No.2) in full (Schedule 2). Section 4 establishes the mechanism by which instruments specified in a Schedule are amended or repealed (s 4). The Schedule 2 item is explicit: “The whole of the instrument , Repeal the instrument.”

• The Determination’s own definition and schedule structure create a framework for future amendment: section 4 provides that “Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.” That is a standard drafting mechanism to ensure the instrument has effect on identified prior instruments.

The instrument does not contain any recorded subsequent amendments within the text provided. It includes a standard caution that the commencement table relates only to provisions “as originally made” and that it will not be updated in the text to reflect later amendments (s 2). The Determination is thus presented as the operative instrument as made in December 2017, replacing the 2014 Determination.

Because the instrument repealed the earlier 2014 Determination entirely (Schedule 2), the practical amendment history is: 2014 Determination in force until repealed; 2017 Determination made and commenced the day after registration and intended to be the governing instrument thereafter (s 2; Schedule 2). No further amendments or modifications are recorded in the provided text. Any later changes to rates, lists of currencies or the hierarchy of sources would require a subsequent amending instrument under the Act’s delegated rule-making powers; none are contained in the source text.

The Determination itself contains no references to case law, judicial decisions or litigation. It does not note any past or pending legal challenges, nor does it cite authorities or precedents. The absence of any litigation history or judicial interpretation in the instrument is material for practitioners seeking settled interpretive guidance.

Practical implications of the absence of litigation history in the instrument include:

• No internal precedents to interpret ambiguous terms. Because the Determination is a plain-text instrument without appended judicial explanation, any interpretive questions , for example, about the meaning of “available” in the hierarchy of rates, or about the application of the timing rule “start of business in Sydney on the fifth business day before the calculation day” , would need to be resolved by reference to the instrument itself, the cross-referenced provisions of the Act, and general principles of statutory construction and administrative law, none of which are set out in the Determination.

• Potential for future litigation over Secretary determinations. The definition of “appropriate rate of exchange” includes, as final recourse, a rate “determined by the Secretary for the purposes of subparagraph 1100(3)(b)(ii) of the Act” (s 5(e)(ii)). The instrument provides no procedural guidance about how such Secretary determinations will be made, published or reviewed. That discretionary layer could be a focus for administrative-law challenges where a person disputes the Department’s valuation. The Determination itself does not include a mechanism for internal review of Secretary determinations of rates; remedies would therefore be sought under the Act’s review and appeal routes and general administrative law.

• No recorded precedents about typographical or naming issues. Schedule 1 lists 137 currency names, some with spelling variants or dual common names (for example, “Mongolian togrog or tugrik”, “Afghani afghani”). The instrument supplies no authoritative codified currency codes (such as ISO codes) and no guidance about resolving naming anomalies. If disputes arise about whether a particular bank or payment should be treated as in a listed currency, those questions would need to be resolved by administrative decision or litigation; no prior judicial guidance is cited in the Determination.

• Reliance on external publications not litigated in the instrument. The Determination makes CBA and RBA publications and foreign central bank publications determinative for rate selection (s 5). How courts treat the incorporation by reference of such external sources into statutory valuation is not discussed in the instrument.

The Determination is short but contains several practical points and potential pitfalls that can affect administration and compliance. These are drawn directly from the instrument’s text and Schedule content.

• Timing specificity , five business days before the calculation day. The Determination requires that the relevant published rate be “available at the start of business in Sydney on the fifth business day before the calculation day” (s 5). That is a precise temporal rule. Practically, administrators must identify the calculation day under subsection 1100(6) of the Act (s 5) and then count five business days back, using the Act’s definition of “business day” (s 5). Miscounting business days, or applying the wrong time zone reference for “start of business in Sydney”, could change which published rate is authoritative. The Determination does not state how to treat public holidays or bank-specific non-publication days beyond the cross-reference to the Act’s “business day” definition.

• Hierarchy of sources and potential for missing rates. The order of preferred sources is: CBA daily foreign cheques buying rate, then CBA daily international money transfer buying rate, then CBA weekly miscellaneous exchange rate, then an RBA rate, and finally either the currency’s central bank rate or a Secretary-determined rate (s 5(a)-(e)). For many listed currencies, daily CBA rates or RBA rates may not exist. In those cases the instrument requires moving down the list; but where none are available, the Secretary’s determination becomes the fallback (s 5(e)). That fallback is discretionary and not procedurally described in the Determination, which can produce unpredictability in valuation unless the Secretary publishes a consistent method.

• Reliance on non-statutory publications. The Determination incorporates CBA and RBA publications as operative inputs (s 5). The instrument does not specify particular CBA or RBA publication titles, table names, or formats beyond the generic descriptors used. Any changes in the banks’ publication practices, formats, or terminology could complicate the Department’s ability to determine which rate is the “daily foreign cheques buying rate” or the “weekly miscellaneous exchange rate” at the specified time.

• Currency-name anomalies in Schedule 1. Schedule 1 lists 137 currencies, and several entries include nonstandard or variant names. Examples in the list include “Afghani afghani”, “Hungarian florint” (a spelling that differs from typical forms), “Mongolian togrog or tugrik”, “Change France Pacifique CFP franc”, and “Trinidad and Tobagan dollar” (spelling). Because the Determination does not include currency codes (for example, ISO 4217 codes) or cross-references, administrative staff may need to resolve which bank or central bank rate corresponds to the Schedule’s textual label. That can create ambiguity, particularly where local or alternative names exist.

Compliance with the Determination requires following the hierarchical rate-selection process and timing rules set out in the instrument when converting amounts denominated in the currencies listed in Schedule 1, and ensuring administrative records support the chosen conversion. The practical steps below are grounded in the instrument’s text (ss 5-7, Schedule 1) and the commencement rule (s 2).

1. Establish whether the amount is in a Schedule 1 currency. Check the currency name against Schedule 1 to confirm the Determination applies (s 6; Schedule 1). Because Schedule 1 lists currency names in text form only, map each textual name to the corresponding market currency (for operational clarity), noting that the Determination does not provide ISO codes. If a currency name is ambiguous, document the mapping decision and its rationale.

2. Identify the relevant calculation day and business days under the Act. The Determination adopts the Act’s definitions of “calculation day” and “business day” (s 5). Determine the calculation day that governs the valuation event under subsection 1100(4) of the Act, then count back to “the fifth business day before the calculation day” using the Act’s definition of “business day.” Clearly document the resulting date.

3. Retrieve published rates at the precise time specified. On that fifth-business-day-before date, obtain the appropriate published rate “at the start of business in Sydney” from the sources in the order set out in s 5:

   • First, check whether a daily foreign cheques buying rate for the currency was available at the Commonwealth Bank of Australia at that time (s 5(a)). If yes, use that rate.
   • If not, check for a daily international money transfer buying rate at the CBA (s 5(b)).
   • If neither daily rate is available, check for a weekly miscellaneous exchange rate at the CBA (s 5(c)).
   • If none of the CBA rates are available, check for a rate at the Reserve Bank of Australia at that time (s 5(d)).
   • If none of the above are available, as last resort either use the rate available at the currency’s central bank at the start of business for that central bank on the same date, or apply a rate determined by the Secretary for the purposes of subparagraph 1100(3)(b)(ii) of the Act (s 5(e)(i)-(ii)).

4. Record source, table name and time. Because the Determination requires a precise source and time, record for each conversion: the source institution (CBA, RBA or central bank), the specific table or publication name (if available), the exact rate used, the date and time of retrieval, and the calculation day that the rate applies to. Where the Secretary issues a rate, retain the Secretary’s determination instrument or publication and its date.