GST and residential care

This information is for providers of residential care services to aged and disabled people.

There are a number of ways in which residential care services can be GST-free and there are different requirements for each way.

Health-related goods and services that don't meet the conditions for GST-free residential care may still be GST-free in other ways. For example, nursing services can also be GST-free as home care or other health services.

Government funded residential care

Your supply of residential care is GST-free if:

• the services are listed under GST-free residential care services
• it is provided through a residential care service (within the meaning of the Aged Care Act 1997), and
• you are an approved provider (within the meaning of the Aged Care Act 1997).

Your supply of residential care is also GST-free if:

• you receive funding from the Commonwealth, a State or a Territory in connection with the supply
• your services are provided to an aged or disabled person, and
• the services are listed under GST-free residential care services.

Fees that you charge to the resident for this care will be payment for a GST-free supply.

See also:

• GST Act: Subsections 38-25 (1) and (2): Residential care etc.
• Aged Care Act 1997External Link
• A New Tax System (Goods and Services Tax) (GST-free Supply—Residential Care—Government Funded Supplier) Determination 2015External Link

Non-government funded residential care

If you provide non-government funded residential care, the criteria for your services to be GST-free differ according to whether your services are provided in:

• a place other than a retirement village
• a retirement village.

Other than a retirement village

If you do not receive any funding directly from government for your supply of residential care services and you do not operate a retirement village, your services are GST-free if:

• the services are provided to an aged or disabled person in a residential setting
• the services are listed under GST-free residential care services
• the services include, and the aged or disabled person has a continuing need for, one or more of the services set out in item 2.1 (daily living activities assistance) or item 3.8 (nursing services) listed under GST-free residential care services
• the services are supplied, under a written agreement with you, as a package made up of accommodation and the services described in the previous two points, and
• the charges for services and accommodation are payable to the same entity.

Privately funded nursing homes and aged-care hostels that provide care to aged or disabled people are considered to be a residential setting if:

• residents do not have a proprietary interest in the property
• residents can be moved at the operator's discretion under certain circumstances
• premises are marketed and made available to the public as a place for care and accommodation, rather than just accommodation
• residents have limited rights compared to residents who lease or own their premises.

Continuing need

You need to establish that an aged or disabled person has a 'continuing need' for one or more of the services set out in item 2.1 (daily living activities assistance) or item 3.8 (nursing services). This can be evidenced by a report of an assessment of a resident's care requirements, conducted by:

• a registered medical practitioner, registered nurse, registered physiotherapist or registered occupational therapist, or
• more than one person, including at least one registered health professional.

Retirement village

If you do not receive any funding directly from government for your supply of residential care services and you operate a retirement village, your services are GST-free if:

• the services are provided to an aged or disabled person in a residential setting – that is:  
  • the person is a resident of a serviced apartment in the retirement village, and
  • there is a written agreement under which the operator of the retirement village provides daily meals and heavy laundry services to all residents of the apartment
• the services are listed under GST-free residential care services
• the services include, and the aged or disabled person has a continuing need for, one or more of the services set out in either item 2.1 (daily living activities assistance) or item 3.8 (nursing services) listed under GST-free residential care services

Serviced apartment

To be a serviced apartment, it is necessary that:

• the apartment is designed to be occupied by aged residents who require either or both the services listed in item 2.1 (daily living activities assistance) or item 3.8 (nursing services) listed under GST-free residential care services
• there is at least one responsible person continuously on call, and in reasonable proximity, to render emergency assistance to the residents of that serviced apartment
• the apartment is part of a single complex of serviced apartments accessible by a common corridor, and
• there is a communal dining facility in the retirement village available to residents of the serviced apartments.

A detached house, row house, terrace house, town house or villa unit is not a serviced apartment.

Daily meals

Daily meals are meals of an adequate variety, quality and quantity that are served each day at times acceptable to residents and management. The requirement will be satisfied if you provide three meals per day plus morning tea, afternoon tea and supper. You will still meet this requirement if a resident is temporarily absent on a particular day and receives their meals elsewhere, or is unwell and advises you not to provide meals at a particular time.

Written agreement

The agreement between you and the resident for the provision of daily meals and heavy laundry services can take the form of a separate written agreement, or a specific provision in an accommodation agreement or residence contract. The agreement must obligate you to provide the daily meals and heavy laundry services to all of the residents in the serviced apartment. This requirement is satisfied if you appoint an external provider as your agent or as your subcontractor.

See also:

• GST Act Subsections 38-25(3) and (3A): Residential care etc.
• GSTR 2012/3: Goods and services tax: GST treatment of care services and accommodation in retirement villages and privately funded nursing homes and hostels
• A New Tax System (Goods and Services Tax) (GST-free Supply—Residential Care—Non-government Funded Supplier) Determination 2015External Link

Accommodation and serviced apartments

Accommodation is not listed under GST-free residential care services. However, accommodation is GST-free if it is supplied in the course of supplying GST-free residential care services. This means the accommodation must be:

• integral to the supply of the care, and the resident is accommodated at the facility so they can receive the care services they require
• supplied as a package made up of accommodation and the GST-free residential care services, with the charges payable to the same entity.

Similarly, the lease, hire, licence or sale of a serviced apartment in a retirement village is GST-free if it is supplied in connection with the supply of GST-free residential care services. However, the serviced apartment and GST-free residential care services do not need to be supplied as a package and the charges do not have to be payable to the same entity.

See also:

• GST Act, Subsections 38-25(4) and (4A): Residential care etc.
• GSTR 2012/3 : Goods and services tax: GST treatment of care services and accommodation in retirement villages and privately funded nursing homes and hostels

Services that are not GST-free residential care

If services are not listed under GST-free residential care services they are not GST-free residential care. This includes visitor meals.

Other services that are specifically excluded from GST-free residential care services, are:

• cleaning of clothing requiring dry cleaning or another special cleaning process
• hairdressing
• motorised wheelchairs and custom made aids – though these may still be GST-free medical aids or appliances
• intensive, long-term rehabilitation services required following, for example, serious illness or injury, surgery or trauma – though these may still be GST-free health services.

There are a number of other ways that health-related goods and services can be GST-free. Use the tables below to find out if your supply is GST-free.

Table A: If you don’t receive government funding

Type of supply	Check if the supply is GST-free in
Medical services	Section 38-7 of the GST Act GST and health
Other health services	Section 38-10 of the GST Act GST and health
Hospital treatment	Section 38-20 of the GST Act GSTD 2012/4 Goods and services tax: What is 'hospital treatment' for the purposes of section 38-20 of the A New Tax System (Goods and Services Tax) Act 1999?
Non-government funded home care	Subsection 38-30(3) of the GST Act
NDIS disability support supplies	Section 38-38 of the GST Act GST and health
Medical aids and appliances	Section 38-45 of the GST Act GST and health

Table B: If you receive government funding

Type of supply	Check if the supply is GST-free in
Other government-funded health services	Section 38-15 of the GST Act
Home care by government-funded suppliers	Subsections 38-30(1), (2) and (4) of the GST Act
Services for which a flexible care subsidy is payable to the supplier under the Aged Care Act 1997	Section 38-35 of the GST Act
Services for which the supplier receives funding under the Disability Services Act 1986 or under a complementary State law or Territory law	Section 38-40 of the GST Act

Supplies with taxable and GST-free components

If you make supplies that have both GST-free and taxable components, you need to apportion the payment between the component that is GST-free and the component that is taxable, and pay GST on the taxable component.

Components that are merely incidental to a main supply can be ignored for GST purposes, with the GST status being determined by the main supply.

See also:

• GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts

Subcontracted services and services to specific entities

Residential care services are generally only GST-free where the contractual recipient of the supply is an individual who receives the services.

If you are contracting with another entity to deliver residential care services on behalf of that other entity, your supply to that entity is generally not GST-free.

However, your supply to that other entity is GST-free, to the extent that your underlying service to the resident is GST-free, where the supply is made to:

• an insurer settling a claim under an insurance policy
• an operator of a statutory compensation scheme
• an operator of a compulsory third party scheme, or
• an Australian government agency.

You can agree with the other entity not to treat the supply as GST-free.

See also:

• GST Act Section 38-60: Third party procured GST-free health supplies

GST-free residential care services

The tables below list the residential care that can be supplied GST-free to residents, subject to the other requirements being satisfied.

These tables are based on the information in:

• A New Tax System (Goods and Services Tax) (GST-free Supply—Residential Care—Government Funded Supplier) Determination 2015External Link
• A New Tax System (Goods and Services Tax) (GST-free Supply—Residential Care—Non-government Funded Supplier) Determination 2015External Link
• Schedule 1 to the Quality of Care Principles 2014External Link, made under section 96-1 of the Aged Care Act 1997

Tables:

• Table 1: Hotel services – to be provided for all residents who need them
• Table 2: Care and services – to be provided for all residents who need them
• Table 3: Care and services – to be provided for all residents who need them – fees may apply

See also:

• Government funded residential care
• Non-government funded residential care

Table 1: Hotel services

Service	Description
Item 1.1 – Administration	General operation of the residential facility, including documentation relating to residents.
Item 1.2 – Maintenance of buildings and grounds	Adequately maintained buildings and grounds.
Item 1.3 – Accommodation	Utilities such as electricity and water.
Item 1.4 – Furnishings	Bedside lockers, chairs with arms, containers for personal laundry, dining, lounge and recreational furnishings, draw-screens (for shared rooms), wardrobe space and towel rails.   Excludes furnishings a resident chooses to provide.
Item 1.5 – Bedding	Beds and mattresses, bed linen, blankets, and absorbent or waterproof sheeting.
Item 1.6 – Cleaning services, goods and facilities	Cleanliness and tidiness of the entire residential facility.   Excludes a resident’s personal area if the resident chooses and is able to maintain this himself or herself.
Item 1.7 – Waste disposal	Safe disposal of organic and inorganic waste material.
Item 1.8 – General laundry	Heavy laundry facilities and services, and personal laundry services, including laundering of clothing that can be machine washed.   Excludes cleaning of clothing requiring dry cleaning or another special cleaning process, and personal laundry if a resident chooses and is able to do this himself or herself.
Item 1.9 – Toiletry goods	Bath towels, face washers, soap, toilet paper, tissues, toothpaste, toothbrushes, denture cleaning preparations, mouthwashes, moisturiser, shampoo, conditioner, shaving cream, disposable razors and deodorant.
Item 1.10 – Meals and refreshments	Meals of adequate variety, quality and quantity for each resident, served each day at times generally acceptable to both residents and management, and generally consisting of 3 meals per day plus morning tea, afternoon tea and supper; Special dietary requirements, having regard to either medical need or religious or cultural observance; Food, including fruit of adequate variety, quality and quantity, and non-alcoholic beverages, including fruit juice.
Item 1.11 – Resident social activities	Programs to encourage residents to take part in social activities that promote and protect their dignity, and to take part in community life outside the residential facility.
Item 1.12 – Emergency assistance	At least one responsible person is continuously on call and in reasonable proximity to render emergency assistance.

Table 2: Care and services

Care or service	Description
Item 2.1 – Daily living activities assistance	Personal assistance, including individual attention, individual supervision, and physical assistance, with the following: bathing, showering, personal hygiene and grooming; maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management; eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary); dressing, undressing, and using dressing aids; moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids; communication, including to address difficulties arising from impaired hearing, sight or speech, or lack of common language (including fitting sensory communication aids), and checking hearing aid batteries and cleaning spectacles.   Excludes hairdressing.
Item 2.2 – Meals and refreshments	Special diet not normally provided.
Item 2.3 – Emotional support	Emotional support to, and supervision of, residents.
Item 2.4 – Treatments and procedures	Treatments and procedures that are carried out according to the instructions of a health professional or a person responsible for assessing a resident’s personal care needs, including supervision and physical assistance with taking medications, and ordering and reordering medications, subject to requirements of State or Territory law.   Includes bandages, dressings, swabs and saline.
Item 2.5 – Recreational therapy	Recreational activities suited to residents, participation in the activities, and communal recreational equipment.
Item 2.6 – Rehabilitation support	Individual therapy programs designed by health professionals that are aimed at maintaining or restoring a resident’s ability to perform daily tasks for himself or herself, or assisting residents to obtain access to such programs.
Item 2.7 – Assistance in obtaining health practitioner services	Arrangements for aural, community health, dental, medical, psychiatric and other health practitioners to visit residents, whether the arrangements are made by residents, relatives or other persons representing the interests of residents, or are made direct with a health practitioner.
Item 2.8 – Assistance in obtaining access to specialised therapy services	Making arrangements for speech therapists, podiatrists, occupational or physiotherapy practitioners to visit residents, whether the arrangements are made by residents, relatives or other persons representing the interests of residents.
Item 2.9 – Support for residents with cognitive impairment	Individual attention and support to residents with cognitive impairment (for example, dementia and behavioural disorders), including individual therapy activities and specific programs designed and carried out to prevent or manage a particular condition or behaviour and to enhance the quality of life and care for such residents and ongoing support (including specific encouragement) to motivate or enable such residents to take part in general activities of the residential facility.

Table 3: Other care and services

Care or service	Description
Item 3.1 – Furnishings	Over-bed tables.
Item 3.2 – Bedding materials	Bed rails, incontinence sheets, ripple mattresses, sheepskins, tri-pillows, and water and air mattresses appropriate to each resident’s condition.
Item 3.4 – Goods to assist residents to move themselves	Crutches, quadruped walkers, walking frames, walking sticks, and wheelchairs.   Excludes motorised wheelchairs and custom made aids.
Item 3.5 – Goods to assist staff to move residents	Mechanical devices for lifting residents, stretchers, and trolleys.
Item 3.6 – Goods to assist with toileting and incontinence management	Absorbent aids, commode chairs, disposable bed pans and urinal covers, disposable pads, over-toilet chairs, shower chairs and urodomes, catheter and urinary drainage appliances, and disposable enemas.
Item 3.8 – Nursing services	Initial assessment and care planning carried out by a nurse practitioner or registered nurse, and ongoing management and evaluation carried out by a nurse practitioner, registered nurse or enrolled nurse acting within their scope of practice.   Nursing services carried out by a nurse practitioner, registered nurse or enrolled nurse, or other professional appropriate to the service (for example, medical practitioner, stoma therapist, speech pathologist, physiotherapist or qualified practitioner from a palliative care team), acting within their scope of practice.   Services may include, but are not limited to, the following: establishment and supervision of a complex pain management or palliative care program, including monitoring and managing any side effects; insertion, care and maintenance of tubes, including intravenous and naso-gastric tubes; establishing and reviewing a catheter care program, including the insertion, removal and replacement of catheters; establishing and reviewing a stoma care program; complex wound management; insertion of suppositories; risk management procedures relating to acute or chronic infectious conditions; special feeding for residents with dysphagia (difficulty with swallowing); suctioning of airways; tracheostomy care; enema administration; oxygen therapy requiring ongoing supervision because of a resident’s variable need; dialysis treatment.
Item 3.11 – Therapy services, such as, recreational, speech therapy, podiatry, occupational, and physiotherapy services	Maintenance therapy delivered by health professionals, or care staff as directed by health professionals, designed to maintain residents’ levels of independence in activities of daily living.   More intensive therapy delivered by health professionals, or care staff as directed by health professionals, on a temporary basis that is designed to allow residents to reach a level of independence at which maintenance therapy will meet their needs.   Excludes intensive, long-term rehabilitation services required following, for example, serious illness or injury, surgery or trauma.

Conditions for residential care services provided to aged and disabled people to be GST-free.