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  • National Disability Insurance Scheme

    If you are a supplier of disability supports and registered for GST, your supplies to a National Disability Insurance Scheme (NDIS) participant may be GST-free.

    Find out about:

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    Determining if a supply is GST-free

    Supplies of disability supports may be GST-free, depending on the kind of support provided and whether or not you receive government funding.

    If you don't receive government funding for making a supply to a participant, use Table A to see if the supply is GST-free.

    If you receive government funding for making the supply to a participant, use Table B to see if the supply is GST-free.

    If you made supplies of disability supports before the NDIS started and they were GST-free because you received government funding for making the supplies, these supplies will continue to be GST-free providing you continue to receive government funding for making those supplies.

    Table A: If you don’t receive government funding

    Type of supply

    Is the supply GST-free?

    Medical aids and appliances

    Yes, if it meets the conditions in Medical aids and appliances.

    Medical services

    Yes, if it falls under the definition of a medical service.

    Other health services

    Yes, if it falls under the definition of eligible other health services.

    Non-government funded residential care

    Yes. Section 38-25 of the GST Act provides for the supply of residential care services to be GST-free. 

    Non-government funded home care

    Yes. Section 38-30 of the GST Act provides for the supply of home care services to be GST-free.  

    NDIS disability support supplies

    Yes, if it meets the conditions in GST-free supplies under section 38-38.

    Table B: If you receive government funding

    Type of supply

    Is the supply GST-free?

    Services for which the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law

    Yes. Section 38-40 of the GST Act: A supply of services is GST-free if the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law in respect of the services.

    Services for which a flexible care subsidy is payable to the supplier under the Aged Care Act 1997

    Yes. Section 38-35 of the GST Act: A supply of flexible care is GST-free if flexible care subsidy is payable under Part 3.3 of the Aged Care Act 1997.

    Residential care by government-funded suppliers

    Yes. Section 38-25 of the GST Act provides for the supply of residential care services to be GST-free.

    Home care by government-funded suppliers

    Yes. Section 38-30 of the GST Act provides for the supply of home care services to be GST-free.  

    Other government-funded health services

    See Section 38-15 of the GST Act.

    If your supply is not GST-free under any of the categories in Table A or Table B, it may be a taxable supply and you will need to account for the GST payable.

    If you make a mix of taxable and GST-free supplies, you may need to review your accounting systems to ensure the correct GST treatment of your supplies.

    See also:

    GST-free supplies under section 38-38

    Some NDIS participants may choose to have the National Disability Insurance Agency (NDIA) administer the funding on their behalf. If you supply disability supports to a participant and claim payments for the supports through the NDIA Provider Portal, the NDIA is paying you on behalf of the participants so you do not fall under the category of 'government funded'.

    To cover this situation, the GST Act has been amended. Under section 38-38, if the following conditions are met, the supply to a participant is GST-free:

    Supplies that may be GST-free include:

    • sales of equipment
    • hiring of equipment
    • services.

    Plan is in effect

    The participant's plan must be in effect under section 37 of the National Disability Insurance Scheme Act 2013 (NDIS Act), which means it must be approved by the NDIA.

    The plan ceases to be effective when it is replaced by another plan, or when the participant ceases to be a participant in the NDIS.

    Reasonable and necessary supports

    The supply must be of one or more reasonable and necessary supports, as defined in the participant's plan.

    Where the participant’s plan specifies an amount (such as time or quantity) of reasonable and necessary supports, any supplies of supports in excess of these specifications will not be GST-free under section 38-38.

    Made under a written agreement

    There must be made a written agreement between you, the supplier, and the participant (or another person).

    The written agreement must identify the participant and state that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of the NDIS Act, in the participant’s NDIS plan.

    The written agreement can be between you and a person other than the participant. Other people can include those who manage the plan and funding for the participant. This would include the NDIA, a plan management provider registered with NDIA, or someone like a guardian or relative of the participant.

    The written agreement may be a single document or a combination of documents, such as letters between you and the other party, and receipts or invoices you issue. It may include documents in electronic form.

    As long as you have written evidence of a legally binding obligation for you to make the supply to the participant as specified in the plan, the requirement for a written agreement is satisfied.

    Example: Supply made under a written agreement in accordance with a self-managed participant's plan

    Joe, a participant in the NDIS, has a plan that specifies that he requires five hours of support on a weekly basis. He requests XYZ Co (XYZ) to supply him with the support for a period of three months based on the NDIS published price. Joe provides XYZ with a letter identifying:

    • that he is a participant, and
    • the type of support he is to be provided with (as specified in his plan).

    XYZ writes to Joe to confirm its agreement to provide the support, including the start date, and signs the letter. For the next three months, XYZ supplies Joe with the requested supports.

    If all the other requirements of section 38-38 of the GST Act are met, these supplies that XYZ makes to Joe are GST-free.

    End of example

    Example: Supply made under a written agreement in accordance with a participant’s plan managed by a plan management provider registered with the NDIA

    ABB Co (ABB) is registered with the NDIA as a plan management provider. A number of participants have engaged ABB to manage their plans for them.

    Thanh, a participant, would like Elite, a provider of disability supports, to deliver one of the reasonable and necessary supports in her plan. With Thanh's consent, ABB emails Elite with Thanh's relevant requirements, including her name and the number of hours of support needed as specified in her plan. Elite writes to Thanh and ABB setting out the details of the support to be provided and the price to be paid, but makes no reference to Thanh's plan. ABB replies in writing to confirm Thanh's agreement to receive the supports from Elite.

    The written agreement requirement is satisfied by the written evidence provided by the combination of ABB’s email setting out the supports required, Elite’s letter confirming support arrangements and ABB's letter of acceptance.

    If all the other requirements of section 38-38 of the GST Act are met, these supplies Elite makes to Thanh are GST-free.

    Note: Neither Elite's letter nor ABB's letter of acceptance, nor both together would be sufficient evidence of the written agreement. This is because these documents do not state that the supply is of a reasonable and necessary support as specified in Thanh's plan. ABB’s email on its own is also not sufficient evidence of the written agreement because it does not evidence a binding obligation on Elite to make the supplies to Thanh.

    End of example

    Supplies determined in a legislative instrument

    For the supply to be GST-free, your supply to the participant must be of a kind specified in a legislative instrument made by the Disability Services Minister.

    The legislative instrument applies to supplies made on or after 1 July 2017 but before 1 July 2021.

    See also:


    Medical aids and appliances

    Medical aids and appliances are GST-free if they meet certain conditions. This includes their sale, hire, repair and spare parts.

    On this page:

    Conditions to be GST-free

    The sale of medical aids and appliances is GST-free if they meet all three of the following conditions:

    • listed in schedule 3 to the GST Act or in schedule 3 to the GST regulations
    • specifically designed for people with an illness or disability
    • not widely used by people without an illness or a disability.

    Medical aids and appliances that satisfy all these conditions are GST-free at every point in the supply chain – from manufacturer to consumer.

    See also:

    Hiring medical aids and appliances

    If medical aids and appliances meet the conditions to be sold GST-free, they can also be hired out GST-free.

    For example, when a chemist hires a wheelchair out to a customer, they do not include GST in the rental fee.

    Spare parts

    Spare parts that are specifically designed for a GST-free medical aid or appliance are sold GST-free. However, generic parts are taxable.

    For example, a replacement wheelchair wheel that is designed with a specific hand grip is not a generic part and is sold GST-free. However, generic batteries sold for an electric wheelchair are taxable because they are not specifically designed for the wheelchair.

    Repairs to GST-free medical aids and appliances

    If a GST-free medical aid or appliance is repaired using a part that is specifically designed for it, any incidental labour or incidental parts that are not specifically designed for it are also GST-free.

    GST applies to the following parts or labour used to repair GST-free medical aids or appliances:

    • parts that are not specifically designed as spare parts for that medical aid or appliance and which are not merely incidental to the supply of specifically designed spare parts  
    • consumables, such as oil or glue, used in the repair or service that are not merely incidental to the supply of specifically designed spare parts  
    • specifically designed spare parts that are merely incidental to the supply of the labour component of the repair service (that is, where the main supply is labour)  
    • the labour component of the repair service where it is not merely incidental to the supply of a specifically designed spare part.

    'Merely incidental' refers to something that is integral, ancillary or incidental to a supply; that is, part of a supply that does not need to be separately recognised for GST purposes.

    For example, a hearing aid is supplied with a small brush used as an accessory to clean the hearing aid so that it performs properly. The brush represents a small part of the value of the total package. In this case, supply of the brush is not regarded as a separate part, but is merely incidental to the supply of the hearing aid.

    Treating medical aids and appliances as taxable

    Under GST law, a purchaser can make an agreement with their supplier to treat GST-free medical aids and appliances as taxable.

    Where a purchaser makes such an agreement, if they are registered or required to be registered for GST, they may be eligible to claim a GST credit for the GST paid.

    The purchaser may still sell these items GST-free to their customers.

    Adding items to the GST Act or regulations

    Only Parliament – and not the ATO – can add new medical aids and appliances to schedule 3 to the GST Act or schedule 3 to the GST regulations.

      Last modified: 06 Dec 2018QC 16263