Reviews of foreign exchange rates 106-08020010

Note: do not use the manual method below unless the system method is not available. The Process page provides the steps to automatically assess the 5% variation and calculate the difference in payment.

Multiply the Centrelink exchange rate by 5%. Add this amount to the exchange rate to get the upper range and then subtract it from the exchange rate to get a lower range. If the exchange rate provided to the customer is outside this range, then a reassessment can occur.

For example, the exchange rate is 45.23

5% of 45.23 is 2.2615 (45.23 x 5/100)

45.23 - 2.2615 = 42.9685 (lower range) and 45.23 + 2.2615 = 47.4915 (upper range)

Therefore the acceptable variation range is 42.9685 to 47.4915. If the actual exchange rate used by the customer is less than 42.9685 or more than 47.4915 then a reassessment can occur. Note: an exchange rate which is lower than Centrelink's rate (that is, customer advises 41.5600 in the example above) could cause the customer's rate to reduce.

The actual UK exchange rate can be substituted for the Centrelink exchange rate for any period during the month for which the payment received applies:

The Centrelink exchange rate for any month is used from the first business day of the month to the day before the first business day of the next month. For example, the first business day of June 2014 was 2 June 2014. Note: in some cases the first business day of the month is not the first day of the month. For example, if the month of December 2012 was used, the first business day of the month would have been Monday, 3rd December 2012. In this case the November 2012 exchange rate would have continued to be applied up to and including 2nd December 2012.

Calculate the exact period during the applicable month that the payment was received at the exchange rate that can be adjusted. For example, if the exchange rate for June 2012 was used and the customer received a payment at an exchange rate of more than 5% difference for 4 June 2012 to 28 June 2012 then this is the period which can be adjusted.

There are specific rules in social security law about when a person can and can't be paid arrears of payment.

As a basic rule of thumb in the case of exchange rates is, if the customer applies for a formal review of decision within 13 weeks of being notified by Centrelink of the exchange rates being used in their assessment:

• arrears should be payable if the review is successful, and
• the actual exchange rate is substituted into the calculation for the applicable period, as outlined above

Note: most customers are notified of the exchange rates used in the calculation of their income in February of each year.