• Specific questions and answers

    The following questions explore what is within the concept of 'home care' for the purposes of section 38-30. None of the questions and answers should be read in isolation, but rather as part of the whole of the information contained in this document.

    Care services supplied as part of home care

    (Note: Effective from 1 August 2013, subsections 38-30(1) and 38-30(3) of the GST Act were amended by Aged Care (Living Longer Living Better)Act 2013 to substitute the term 'home care' for the term 'community care'.)

    Question 1. Are supplies of home care services to aged or disabled people GST-free in the following situations?

    Non-interpretative – straight application of the law

    (a) By a government funded supplier:

    The supply of care services to an aged or disabled person by a government funded supplier is GST-free where the requirements of subsection 38-30(1), (2) or (4) are met.

    Subsection 38-30(1) provides that care services are GST-free where a home care subsidy is payable under Part 3-2 of the Aged Care Act 1997 to the supplier.

    Subsection 38-30(2) provides that care services are GST-free where the supplier receives funding under the Home and Community Care Act 1985 in connection with that supply.

    Under subsection 38-30(4) the supply of care services is GST-free where:

    • the supplier receives funding from the Commonwealth, a state or a territory in connection with that supply
    • the services are provided to a frail, older person or a younger person who
      • has a moderate, severe or profound disability (including addiction to a drug)
      • lives at home
      • would, in the absence of services of the kind mentioned in Schedule 1, be at risk of prematurely or inappropriately needing
        • long term care in a hospital or other institution, or
        • residential care within the meaning of the Aged Care Act 1997, and 
         
       
    •  the care is of a kind mentioned in Schedule 1 to GST-free Supply (Care) Determination 2000.

    (b) By a non-government funded supplier:

    The supply of home care services to an aged or disabled person, by a non-government funded supplier, is GST-free under subsection 38-30(3) to the extent that the services are of a kind covered by item 2.1 of Part 2 of Schedule 1 to the Quality of Care Principles (Item 2.1).

    Services that are not covered by Item 2.1 include:

    • assistance with housework
    • assistance with gardening
    • meal preparation services
    • grocery shopping for individuals
    • monitoring medication
    • rehabilitation services
    • assistance with writing cheques, letters, etc
    • advocacy services
    • provision of social and community activities, such as providing companionship, craft and reading activities to individuals, and
    • driving individuals to and from appointments.

    Where a non-government funded supplier provides a package of care services consisting of some Item 2.1 services and other services, the supply may be a mixed supply comprising a separately identifiable part that is the supply of home care (GST-free) and a part that is taxable.

    If the supply is a mixed supply, the supplier will need to apportion the consideration between the component that is taxable and the component that is GST-free. Goods and Services Tax Ruling GSTR 2001/8External Link 'apportioning consideration for a supply that includes taxable and non-taxable parts' explains a mixed supply and how to apportion the consideration between the GST-free and taxable parts of such a supply.

    Note: Some supplies of supports by a non-government funded supplier to disabled persons who are participants in the National Disability Insurance Scheme may be GST-free under section 38-38. For more information on section 38-38, see Issue 2 in Part 12 below.

    Meals supplied as part of home care

    (Note: Effective from 1 August 2013, subsections 38-30(1) and 38-30(3) of the GST Act were amended by Aged Care (Living Longer Living Better)Act 2013 to substitute the term 'home care' for the term 'community care'.)

    Question 2. Are supplies of meals as part of home care to aged or disabled people in the following situations GST-free?

    Non-interpretative – straight application of the law

    (a) By a government funded supplier:

    The supply of meals to an aged or disabled person by a government funded supplier is GST-free where the requirements of subsection 38-30(1), (2) or (4) are met.

    Subsection 38-30(1) provides that the supply of meals as part of the supply of home care is GST-free where a home care subsidy is payable under Part 3-2 of the Aged Care Act 1997 to the supplier.

    Subsection 38-30(2) provides that the supply of meals as part of the supply of home care is GST-free where the supplier receives funding under the Home and Community Care Act 1985 in connection with that supply.

    Under subsection 38-30(4) the supply of meals is GST-free where the supplier receives funding from the Commonwealth, a state or a territory in connection with the supply and it is made to a frail, older person or a younger person who:

    • has a moderate, severe or profound disability (including addiction to a drug)
    • lives at home, and
    • would, in the absence of services of the kind mentioned in Schedule 1, be at risk of prematurely or inappropriately needing
      • long term care in a hospital or other institution, or
      • residential care within the meaning of the Aged Care Act 1997.
       

    (b) By a non-government funded supplier:

    No, supplies of meals by a non-government funded supplier are not GST-free under section 38-30. This is because meals are not covered by Item 2.1.

    Respite care as part of home care

    (Note: Effective from 1 August 2013, subsections 38-30(1) and 38-30(3) of the GST Act were amended by Aged Care (Living Longer Living Better)Act 2013 to substitute the term 'home care' for the term 'community care'.)

    Question 3. Are supplies of respite care services to aged or disabled people in the following situations GST-free?

    Non-interpretative – straight application of the law

    (a) By a government funded supplier:

    Home care includes respite care. Accordingly, home care services supplied under a respite care arrangement are GST-free where the requirements of subsections 38-30(1), (2) and (4) are satisfied.

    For an explanation of the services that are GST-free under subsection 38-30(1), (2) or (4), refer to question 1(a) under the heading 'Care services supplied as part of home care'.

    (b) By a non-government funded supplier:

    Home care includes respite care. Accordingly, home care services supplied under a respite care arrangement are GST-free where the requirements of subsection 38-30(3) are satisfied.

    For an explanation of the services that are GST-free under subsection 38-30(3), refer to question 1(b) under the heading 'Care services supplied as part of Home Care'.

      Last modified: 18 Nov 2013QC 27139