Australia's obscure coin laws

Don’t get caught out next time you pay in cash.

If you have a jar of loose change sitting at home, spending it may not be as easy as you would think.

While Australian banknotes are legal tender throughout the country, the use of Australian coins is restricted.

Shops can refuse coins

According to the Currency Act 1965 coins are only legal tender for limited payment amounts.

You can use up to $5 worth of coins in any combination of 5c, 10c, 20c and 50c coins and up to 10 times the face value of $1 or $2 coins.

For example, if you want to pay for lunch at a café with five cent coins, you can only use up to $5 worth of five cent coins to pay. Any more than that will not be considered legal tender and can be refused by the retailer.

You can still use 1c and 2c coins

While copper 1c and 2c coins were last minted 30 years ago and withdrawn from circulation in 1992, they are still legal tender but are not considered currency (money officially released for circulation).

Copper coins are only considered legal tender in limited amounts up to 20c in value and can be exchanged with banks for face value. This means you can only use 10 2c coins or 20 1 cent coins in a transaction.

You may find they have more value to a coin collector than as legal tender.

You can’t pay with damaged coins

Damaged and worn coins are not valid currency but you can return them to your bank for face value. 

If you have mutilated coins (which are not readily identifiable as coins) your bank will require you to complete a Mutilated Coin Claim form and your deposit will be sent to the Royal Australian Mint for processing. If your mutilated coins are accepted the Mint will pay you scrap metal value, not the full face value of the coin.

You can pay with collector coins

Uncirculating coins, also known as numismatic or collector coins, are intended for coin collectors and as gifts rather than for the payment of goods or services. 

Uncirculating coins produced by the Perth Mint and Royal Australian Mint that feature an approved effigy of Queen Elizabeth II on the obverse side are legal tender.

These coins can also be redeemed for face value at banks, however, they’re likely be worth much more than face value for collectors.

It’s a crime to deface coins

It’s a criminal offence under the Crimes (Currency) Act 1981 to deface or destroy an Australian coin.

Defacing includes coating the surface of the coin with any sort of material.

The penalty for defacing, or selling or possessing defaced coins, is a $5000 fine or imprisonment for two years.

You may also be guilty of making counterfeit money if you alter a genuine coin.

The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person’s particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.