Edited version of private advice

Authorisation Number: 1052360767486

Date of advice: 14 February 2025

Ruling

Subject: GST - assets

Question 1

Are your supplies of psychotherapy GST free under section 38-10 of the A New Tax System (Goods and Services Tax) Act 1999?

Answer 1

Yes

This ruling applies for the following period:

XX February 20XX to XX February 20XX

Relevant facts and circumstances

You are a sole trader and operate a business which provides social work services. You are registered for GST.

You hold a Master of Social Work and are a registered member of the Australian Association of Social Workers. From 1 July 20XX, you intend to be registered as a social worker with the Social Workers Registration Board of South Australia.

You provide psychotherapy services within the scope of social work to both NDIS and non-NDIS participants. These services are provided to children up to the age of 18.

Psychotherapy services fit within the scope of social work because they align with the profession's core principles of empowerment, social justice, and holistic care.

Psychotherapy, counselling, and play-based therapy are widely recognised within the social work profession as valid and necessary interventions for treating a range of emotional, behavioural, and mental health issues. Social workers draw on a holistic, person-in-environment perspective that takes into account not only an individual's psychological state but also their social, cultural, and familial contexts. In many cases, these services are considered essential for supporting meaningful change, because they help clients address underlying trauma, develop healthier coping strategies, and foster resilience. Professional bodies such as the Australian Association of Social Workers acknowledge these approaches as integral to comprehensive social work practice, emphasising that they are evidence-based, client-centred, and can be adapted to meet the diverse needs of individuals, families, and groups.

You always enter into agreements for your services in writing directly with your clients and do not provide services on behalf of any other provider.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 38-10

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 unless otherwise noted.

Subsection 38-10(1) of the GST Act provides that a supply is GST-free if:

(a)           it is a service of a kind specified in the table in the section, or of a kind specified in the regulations; and

(b)           the supplier is a recognised professional in relation to the supply of services of that kind; and

(c)            the supply would be generally accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the recipient of the supply.

All three of the above requirements must be satisfied for your supply of psychotherapy to be GST-free under subsection 38-10(1) of the GST Act.

Service of a kind specified in the table

You engage your patients directly and provide various psychotherapy services directly to them.

Your supply of these services is considered to be within the scope of social work. A 'social work' service is listed at Item 21 in the table in subsection 38-10(1) of the GST Act.

Therefore, paragraph 38-10(1)(a) of the GST Act is satisfied.

Recognised professional

Section 195-1 defines a recognised professional to include a person who must be registered, permitted, or approved under a State or Territory law to provide the listed health service. If there is no relevant state or territory law, a recognised professional is a member of a professional association that relates to the listed service and has the same registration requirements nationally.

You are a member of the Australian Association of Social Workers (AASW) as a social worker and provide social work services to your patients. On their website (www.aasw.asn.au), the AASW describes their organisation as "the professional body for social workers in Australia. As well as representing and supporting social workers in their essential work, we set the benchmarks for professional education and practice in social work."

Therefore, it is accepted that you are currently a recognised professional in relation to supplying social work services and will continue to be a recognised professional after 1 July 2025 once you register with the Social Workers Registration Board of SA.

Therefore, paragraph 38-10(1)(b) of the GST Act is satisfied as you directly perform social work services and are a recognised professional.

Appropriate treatment

To satisfy the requirement under paragraph 38-10(1)(c) of the GST Act, the service must generally be accepted in the profession associated with supplying services of that kind (in this case, the social work profession) as being necessary for the appropriate treatment of the recipient of the supply.

Paragraphs 10 and 11 of Goods and Services Tax Industry Issues Health Industry Partnership Issue 2.a Section 38-10 Other health services go on to say that for the third requirement to be satisfied, a health professional is supplying appropriate treatment when they use their professional skills to:

•                assess a patient's health;

•                work out a course of action to preserve, restore or improve the patient's physical or psychological wellbeing, as far as the practitioner's training allows; and

•                supply a treatment that is generally accepted by their profession as being appropriate for the patient.

Therefore, where a patient receives trauma informed therapy, expressive therapy, narrative approach therapy, play and art therapy services as part of psychotherapy treatment in accordance with their treatment plan, these services generally would be accepted in the social working profession as being necessary for the appropriate treatment of that patient. Therefore, the requirement under paragraph 38-10(1)(c) of the GST Act for the service to be generally accepted as an appropriate treatment is satisfied.

Conclusion

As all three of the requirements under subsection 38-10(1) of the GST Act are satisfied, you are making a GST-free supply of a social worker when providing psychotherapy treatment as a component of a social work service to your patients.

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