Edited version of private ruling

Authorisation Number: 1011652023276

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Ruling

Subject: GST and community care services

Question

Are you making a GST-free supply when you supply community care services to a disabled person and the services that you supply are paid for by a family member on behalf of the client?

Answer: Yes.

You will be making a GST-free supply when you supply a disabled person with community care services where the services are paid for by the clients family member where the services are included in the Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles (item 2.1 of the QCP).

Other services such as gardening and home maintenance will not be GST-free, these will be subject to GST as they are not included in item 2.1 of the QCP.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You are a company and are registered for GST. You provide personal, home and respite care including bathing, showering, personal hygiene, dressing and feeding. You also sometimes provide gardening and home maintenance services to people in their own homes. You do not provide residential care.

You are not an approved provider under the Aged Care Act and you do not receive any funding from the government for your supplies.

In one particular instance you provide personal care services to a client in their own home where you have an arrangement with a family member who pays for the service on behalf of the client. You send the invoice to the family member who pays you directly. Your services involve assisting the client with hygiene, grooming, feeding, bathing, and showering, eating, dressing and undressing, moving and managing incontinence. On occasion, you also provide some gardening and home maintenance services.

Reasons for Decision

GST is payable on taxable supplies. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you make a taxable supply if:

· you make the supply for consideration

· the supply is made in the course or furtherance of an enterprise you carry on

· the supply is connected with Australia, and

· you are registered, or required to be registered for GST.

However, to the extent the supply is GST-free or input taxed it is not a taxable supply.

The GST Act specifically identifies and categorises certain supplies as GST-free or input taxed. GST is not payable in relation to GST-free supplies, as they are not taxable supplies. Even though GST is not payable on GST-free supplies, suppliers are entitled to an input tax credit for creditable acquisitions relating to those supplies.

You have advised that you supply home care services to people in their own home and since you do not receive any government funding, consideration must be given as to the operation and effect of section 38-30 of the GST Act in your circumstances.

Subsection 38-30(3) of the GST Act provides that a supply of community care is GST-free if the supply is of services:

· that are provided to one or more aged or disabled people (paragraph 38-30(3)(a) of the GST Act); and

· that are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles (paragraph 38-30(3)(b) of the GST Act).

Section 195-1 of the GST Act defines community care as having the meaning given by section 45-3 of the Aged Care Act 1997. Subsection 45-3(1) of the Aged Care Act 1997 provides that community care is care consisting of a package of personal care services and other personal assistance provided to a person who is not being provided with residential care.

Your services involve assisting a client with hygiene, grooming, feeding, bathing, and showering, eating, dressing and undressing, moving and managing incontinence. By their nature these services would constitute care consisting of a package of personal care services and other assistance. It follows that the services you provide come within the meaning of community care pursuant to subsection 43-3(1) of the Aged Care Act 1997.

As you provide the community care to a disabled person, the first requirement of subsection 38-30(3) of the GST Act that the services are provided to one or more aged or disabled people is satisfied.

Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles (item 2.1 of the QCP) cover services which involve personal assistance, including individual attention, individual supervision, and physical assistance with:

· 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; and

· 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;

· Excluding hairdressing.

You provide the client with assistance with hygiene, grooming, feeding, bathing, showering, eating, dressing and undressing, moving and managing incontinence, all of which are covered by item 2.1 of the QCP listed above. Accordingly, the requirement in subsection 38-30(3) of the GST Act that the services are of a kind covered by item 2.1 of Part 2 of Schedule 1 to the Quality of Care Principles has been satisfied.

It follows that the care services you supply the elderly client satisfy all the requirements of subsection 38-30(3) of the GST Act and as such are GST-free. This will be the case where you supply a package of personal care services to other clients which satisfy the requirements of subsection 38-30(3) of the GST Act.

Furthermore, notwithstanding that you have entered into the arrangement to provide your services to the client with that clients family member and that the family member pays for your services, the family member does so on the client's behalf and as such the supply is provided to that client for the purposes of subsection 38-30(3) of the GST Act.

Gardening and Home maintenance

Please note other services such as domestic assistance, gardening, home maintenance and preparation of meals are not covered by item 2.1 of Part 2 of Schedule 1 to the Quality of Care Principles. Where your services are not covered by item 2.1 of Part 2 of the Schedule 1 to the Quality of Care Principles, they will not satisfy the second requirement in subsection 38-30(3) of the GST Act and will not be GST-free. The supply of these services will be a taxable supply.