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Edited version of your written advice
Authorisation Number: 1051298517262
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You cannot rely on this edited version in your tax affairs. You can only rely on the advice that we have given to you or to someone acting on your behalf.
The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions.
Date of advice: 24 October 2017
Ruling
Subject: GST and supply of nursing and aged care services
Question
Is the supply of nursing and aged care services provided to an aged person, GST-free?
Answer
The supply of nursing and aged care services will be GST-free provided the components of your services are covered under Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles. Please refer to the reason for decision.
Relevant facts and circumstances
● You are not a registered nurse and registered for goods and services tax (GST).
● Your income is likely to be over $75,000.
● You provide nursing and aged care services to an aged person (recipient) who lives at their own home.
● You travel to the recipient’s home on a regular basis to provide the services.
● You do not operate a residential care facility.
● The recipient’s child makes arrangements with you to provide the services and the recipient pays you for the services.
● You are not registered with any Government organisations to provide this service and you do not receive any Government funds.
● You do not have a written agreement with the recipient to provide the services.
● You provide a full time care including administering medicine and driving the recipient around.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 – section 9-5
A New Tax System (Goods and Services Tax) Act 1999 – section 38-25
A New Tax System (Goods and Services Tax) Act 1999 – section 38-30
Reasons for decision
GST is payable on a taxable supply. Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) you make a taxable supply if you make the supply for consideration; the supply is made in the course or furtherance of an enterprise that you carry on; the supply is connected with the indirect tax zone; and you are registered or required to be registered.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
Residential Care
Section 38-25 of the GST Act provides that the supply of residential care services made by a government funded and non-government funded supplier will be GST-free.
According to subsection 38-25(3) of the GST Act, the supply of residential care services to an aged or disabled person by a non-government funded supplier is GST-free where:
(a) the services are supplied in a residential setting;
(b) the Aged Care Minister has determined in writing that the services are of a kind covered by Schedule 1 to the Quality of Care Principles; and
(c) the services include, and are only provided to people who require, the services set out in:
(i) item 2.1 (daily living activities assistance) of part 2 of that Schedule (item 2.1); or
(ii) item 3.8 (nursing services) of part 3 of that Schedule (item 3.8).
For the purposes of paragraph 38-25(3)(b) of the GST Act, the Aged Care Minister has made a determination ‘GST-free Supply (Residential Care – Non-Government Funded Supplier) Determination 2000’. This determination duplicates the services listed in Schedule 1 of the Quality of Care Principles and provides that these services are of a kind covered by Schedule 1 to the Quality of Care Principles if supplied in the circumstances mentioned in the determination.
The circumstances determined by the Aged Care Minister are:
● The resident has a continuing need for the services mentioned in Item 2.1 or Item 3.8; and
● The services are supplied, under a written agreement with the supplier, as a package made up of:
● the services mentioned in Item 2.1 or Item 3.8;
● other services mentioned in Schedule 1 to the Quality of Care Principles that are needed by the resident, and
● accommodation, and
The charges for services and for accommodation are payable to the same entity.
Based on the facts provided, you do not have a written agreement with the recipient of the supply and do not provide accommodation. Accordingly, the supply of your services to the aged person will not satisfy the requirements of subsection 38-25(3) of the GST Act.
Home Care
Subsection 38-30(3) of the GST Act provides that the supply of home care is GST-free if the supply of service is provided to an aged or disabled person and that are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule1 to the Quality of Care Principles.(Item 2.1)
Item 2.1 under Part 2 of “Care and services to be provided for all residents who need them” provides the following list of care and services:
Personal assistance, including individual attention, individual supervision, and physical assistance, with the following:
(a) bathing, showering, personal hygiene and grooming;
(b) maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management;
(c) eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary);
(d) dressing, undressing, and using dressing aids;
(e) moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids;
(f) 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.
Based on the information provided, you are providing full time care including driving the client around and administering medicine to the client. The services provided by you should be one of the services listed in Item 2.1. Where the services are not listed in Item 2.1 the supply of those services will be a taxable supply under section 9-5 of the GST Act.
You are required to itemise your services to ensure that they are covered under the list above. Please note that if your services are not included in the above list under Item 2.1, then those services are not GST-free.
If part of your services are GST-free under subsection 38-30(3) of the GST Act and taxable under section 9-5 of the GST Act, then you 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 2001/8 may be of assistance as it provides guidance on how to apportion the consideration between the GST-free and taxable parts of a mixed supply.
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