When home care services are GST-free
Your home care services are generally only GST-free if the other contracting party for the supply is either an:
- individual who receives the care
- insurer, compensation operator or government agency
If you are contracting with another entity to deliver home care services on behalf of that other entity to a care recipient, your supply to that other entity is generally not GST-free.
Example: supply of subcontracted services to a care recipient
ERT, an approved home care provider, is registered for GST and receives a home care subsidy for home care services they supply to Sylvia, a home care package consumer.
Under her home care package, ERT is the approved provider to supply Sylvia with home help services on 5 days each week. There is a home care agreement between ERT and Sylvia for the supply of the home help service.
ERT has a staff shortage one week and is not able to provide the home help services itself. ERT engages another home care service provider, Helping Hand Pty Ltd, to provide Sylvia's home help services. Helping Hand is registered for GST and ERT agrees to pay them $165 for services for that week. There is no contractual relationship between Helping Hand and Sylvia.
Helping Hand's supply to ERT is not GST-free and they include GST of $15 in their activity statement for this supply. ERT claims a GST credit of $15 in their activity statement in relation to this acquisition.
ERT is also making a supply of home help services to Sylvia as part of her home care package for this week. ERT charges Sylvia $150. This supply is GST-free because ERT receives a home care subsidy for this care service.
End of exampleSupply made to insurer, compensation operator or government agency
Your supply may be GST-free if you supply services to any of the following:
- insurer settling a claim under an insurance policy
- operator of a statutory compensation scheme
- operator of a compulsory third party scheme
- Australian government agency, being the Australian Government, a state or a territory or an authority of the Commonwealth, a state or a territory (including local government).
The supply to any of the above is GST-free to the extent that the underlying service you provide to the care recipient is a GST-free health service. However, you can agree with the insurer, compensation operator or government agency not to treat the supply to them as GST-free.
GST-free underlying service
If your supply is made to an Australian government agency, the underlying home care service you provide to the care recipient is GST-free if the service is in the GST-free lists in either Other government funded care or Non-government funded home care.
If your supply is made to an insurer, an operator of a statutory compensation scheme or an operator of a compulsory third party scheme, the underlying home care service you provide to the care recipient is GST-free if the service is in the GST-free list in Non-government funded home care.