ATO Interpretative Decision
ATO ID 2005/41
Goods and Services Tax
GST and supply of care services to a person who lives in supported accommodationFOI status: may be released
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This ATO ID is being reviewed for minor updates following the replacement of the Aged Care Act 1997 with the Aged Care Act 2024 from 1 November 2025.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a supplier of care services, making a GST-free supply under subsection 38-30(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it is funded for and supplies one of the services listed in Schedule 1 to the GST-free Supply (Care) Determination 2000 (Care Determination), to a client who lives in supported accommodation?
Decision
Yes, the entity is making a GST-free supply under subsection 38-30(4) of the GST Act when it is funded for and supplies one of the services listed in Schedule 1 to the Care Determination, to a client who lives in supported accommodation.
Facts
The entity is a supplier of care services. The entity supplies services that are listed in Schedule 1 to the Care Determination. The entity supplies these services to a young client who suffers from a disability. The entity receives payment for its services from funds that are sourced from the relevant State Government budget. The entity is not contracted by a government entity or any business entity to provide these services to the client.
The client is not living in long term care in a hospital or other institution, is not in receipt of residential care within the meaning of the Aged Care Act 1997 and is not currently in receipt of residential care pursuant to subsection 38-25(2) or subsection 38-25(3) of the GST Act.
The client lives in supported accommodation, whereby they live independently in the community in shared accommodation, but require assistance with daily living activities from attendant carers. If the client did not receive these services, they would be at risk of prematurely needing long term care in a hospital or other institution.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Subsection 38-30(4) of the GST Act provides that a supply of care is GST-free if:
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- the supplier receives funding from the Commonwealth, a State or a Territory in connection with the supply, and
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- the supply of the care is of a kind determined in writing by the Aged Care Minister to be similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act.
For the purposes of subsection 38-30(4) of the GST Act, it is considered that a payment constitutes 'funding from the Commonwealth, a State or a Territory' if the funds are sourced from Commonwealth, State or Territory budgets under a government-funded care program.
The entity receives payment for its services from funds that are sourced from the relevant State Government budget under a government-funded care program and as such, the first requirement of subsection 38-30(4) of the GST Act is satisfied.
The second requirement of subsection 38-30(4) of the GST Act requires that the supply of the care is of a kind determined in writing by the Aged Care Minister to be similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act.
Clause 4 of the Care Determination provides that the supply of care of a kind mentioned in Schedule 1 to the Care Determination to a 'targeted person' is similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act.
The term 'targeted person' is defined in the Care Determination to mean a frail, older person or a younger person who:
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- has a moderate, severe or profound disability (including addiction to a drug)
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- lives at home, and
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- would, in the absence of services of the kind mentioned in Schedule 1 to the Care Determination, be at risk of prematurely or inappropriately needing:
- (i)
- long term care in a hospital or other institution, or
- (ii)
- residential care within the meaning of the Aged Care Act.
The entity provides its services to a young client who suffers from a disability. If the client did not receive these services, they would be at risk of prematurely needing long term care in a hospital or other institution. As such, it remains to be determined whether the client 'lives at home'.
A person 'lives at home' when they are living in the community but are not in long term care provided in a hospital or other institution or through a residential care service within the meaning of the Aged Care Act. For the purposes of the Care Determination, a person does not have to live in their private home to satisfy the requirement that they live at 'home'.
The entity is supplying services to a client who lives in supported accommodation. Although they require assistance with daily living activities and do not live in their own private home, they do live independently in the community in shared accommodation. They are not living in long term care provided in a hospital or other institution or in long term care provided through a residential care service within the meaning of the Aged Care Act. As such, the client meets the definition of a 'targeted person' as provided in the Care Determination.
The services that the entity supplies to the client are listed in Schedule 1 to the Care Determination.
Therefore, the entity is supplying services of a kind determined in writing by the Aged Care Minister to be similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act and the second requirement of subsection 38-30(4) of the GST Act is satisfied.
The entity is making a GST-free supply under subsection 38-30(4) of the GST Act when it supplies one of the services that is listed in Schedule 1 to the Care Determination, to a client who lives in supported accommodation.
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 38-30
subsection 38-30(2)
subsection 38-30(4)
paragraph 38-30(4)(a)
paragraph 38-30(4)(b)
the Act
Other References:
GST-free Supply (Care) Determination 2000, Schedule 1
Keywords
Goods and services tax
GST free
GST health
Section 38-30 - community care
ISSN: 1445-2782
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