Edited version of your private ruling

Authorisation Number: 1012455459757

Ruling

Subject: GST and medical aid products

Question 1

Are you making a GST-free supply when you make a supply of the 'chair monitor'?

Answer

Yes, you are making a GST-free supply under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you make a supply of the 'chair monitor'.

Question 2

Are you making a GST-free supply when you make a supply of the 'wireless nurse call pendant'?

Answer

Yes, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you make a supply of the 'wireless nurse call pendant'.

Question 3

Are you making a GST-free supply when you make a supply of the 'fall out mat'?

Answer

Yes, you are making a GST-free supply under subsection 38-45(1) of the GST Act when you make a supply of the 'fall out mat'.

Relevant facts and circumstances

· You are an entity.

· You carry on a business and you are registered for the goods and services tax (GST).

· You already supply medical aids to nursing homes and hospitals.

· You have now developed a number of new medical aid products:

- the chair monitor,

- the wireless nurse call pendant, and

- the fall out mat.

· You are the manufacturer and distributor of the products.

· You will supply these products to nursing homes, hospitals and in clinical trials.

· All products cannot be used and cannot function without connection to a nurse call system. They must all be plugged into an existing nurse call system to function. They are not spare parts for the nurse call system. They are standalone specific alert devices but need to be connected to a nurse call system.

Chair monitor

· The specific monitor or alarm is made specifically for use by people with a disability or illness, such as dementia patients or those who are sick and elderly who are at high risk of falls and related injuries.

· The specific monitor is designed for use only in a hospital or nursing home environment. Its sole purpose is to alert staff that a high falls risk patient is on the move, and to reduce the risk of further harm. If a person were to try to use it in a home environment it would not be attached to a nurse call and so would not have the ability to alarm therefore being useless.

· The monitoring device is vital for patients with dementia, postural hypertension, or sedating medications, as prevention of injury is now a priority to many aged care providers.

· The specific monitor provides no benefits for people who do not have a disability or illness.

Wireless nurse call pendant

· The specific nurse call pendant can only be used in nursing homes and hospitals and works in the following way:

§ It is a pendant that a patient can wear around their neck with a break apart lanyard for safety.

§ It has a large easy to press button. Its easy access means that if a patient has a fall or requires help it can be easily pressed.

§ The pendant is in direct communication to a wireless receiver configured to an existing nurse call system.

§ If a patient falls or needs urgent medical attention, the button on the pendant can be pushed. This in turn sends a signal to a converter box which pages the nurse call system.

§ The device cannot function in a domestic environment.

§ With this medical aid, the patient has to just squeeze the pendant and it will call for a nurse immediately.

§ This device is designed for use by patients with visual impairment or disabilities, and aged people with mobility issues, within a hospital environment.

§ The pendant only has a use within an aged care facility and within a nursing environment, for sick and elderly people and requires to be connected to an existing nurse call system to function.

§ The pendant provides no benefits for people who do not have a disability or illness.

Fall out mat

· The fall out mat is used in nursing homes and hospitals and works in the following way:

§ It is a cushion that is placed on the floor beside a bed.

§ Within the cushion there is an electronic monitoring device, which is required to be connected to an existing nurse call out system.

§ It only works when it is connected to the nursing alarm system which is available in hospitals and selected high care nursing homes. For example they are not used for Low care nursing homes.

§ The device plugs into the existing nurse call by means of a plug.

§ The plug component of the mat can only be used with the nurse call out system. It is not a general use plug like a telephone plug; it can only be used with the Nursing alarm system.

§ The fall out mat will call the nurse call system when a patient falls from or rolls out of bed, therefore avoiding prolonged periods of time on the floor. The nurse call only gets heard at the nurse station.

§ The fall out mats are set up by nurses to known patients that need monitoring and have a habit of falling from bed. They also provide soft landing preventing injury.

§ The fall out mat only has a use within an aged care facility within a nursing environment, for sick and elderly people who need monitoring and requires to be connected to an existing nurse call system to function.

§ The fall out mat provides no benefits for people who do not have a disability or illness.

§ The fall out mats are marketed to high care nursing home patients with the nurse call out system.

§ The fall out mats are designed for a hospital, aged care application. Some patients will roll out of bed and fall during the night, injuring themselves and potentially lying injured until discovered.

§ The mat has a pressure sensor built in and has two functions:

· to give the patient a soft landing when falling from bed; and

· as a monitor to let the nurse know that their patient has fallen out of bed and it will continue to call the nurse call until help arrives and a cancel button is pushed. This makes a very effective monitoring device for the nurse.

There is no agreement between you and any recipients of the supply that the supply of the specific monitor, nurse pendant or the fall out mat will not be treated as a GST-free supply or will be treated as a taxable supply.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-45(1),

A New Tax System (Goods and Services Tax) Act 1999 Schedule 3 table item 33, and

A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 38-45.01.

Reasons for decision

Under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), the supply of a medical aid and appliance is GST-free where the medical aid or appliance:

· is covered by Schedule 3 to the GST Act (Schedule 3), or specified in the A New Tax

System (Goods and Services Tax) Regulations 1999 (GST Regulations); and

· is specifically designed for people with an illness or disability; and

· is not widely used by people without an illness or disability.

Item 33 in the table in Schedule 3 (Item 33) lists 'medical alert' devices. The term 'medical alert' devices is not defined in the GST Act. Where a term is not defined in the relevant Act, it takes on its ordinary meaning, unless the term has a special or technical meaning. Where a term has a special or technical meaning, it is necessary to determine its meaning by reference to the industry to which that term relates (Herbert Adams Pty Ltd v. Federal Commissioner of Taxation (1932) 47 CLR 222; (1932) 2 ATD 31).

The term 'medical alert' devices is not defined in medical dictionaries. For the purposes of item 33, a 'medical alert' device is interpreted to mean a device that is designed for the purpose of alerting medical/caring personnel or an ambulance service that a person is in need of emergency medical assistance or that the person has a medical condition that may require specific treatment.

It is considered that medical aids or appliances listed in Schedule 3 that may be acquired by aged persons for use in the event that an illness or disability befell them (for example 'medical alert' device) will satisfy the requirement that the medical aid or appliance be 'specifically designed for people with an illness or disability'.

Specific monitor

In this case, the specific monitor is designed for the purpose of alerting nursing staff to the fact that a high falls risk patient is on the move, and needs immediate assistance. Therefore, the specific alarm device falls within the meaning of a 'medical alert' device under Item 33.

Furthermore, the specific monitor device is specifically designed for people with an illness or disability and is not widely used by people without an illness or disability.

As all the requirements of subsection 38-45(1) of the GST Act are satisfied, you will be making a GST-free supply when you supply the chair monitor device to be used in hospitals and nursing homes.

Nurse call pendant

In this case, the pendant is specifically designed for emergencies and its sole purpose is to call nursing staff to assist with the patient's specific medical needs. Its easy access means that if a patient has a fall or requires help it can be easily pressed. This is also helpful to sight impaired patients within a hospital environment.

Therefore, it is considered that the nurse call pendant is a 'medical alert' device and is covered by Item 33.

Furthermore, the pendant is specifically designed for people with an illness or a disability and is not widely used by people without an illness or a disability. It is mainly used by patients with visual impairment or disabilities, and aged people with mobility issues, who may find themselves in an emergency situation.

As all the requirements of subsection 38-45(1) of the GST Act are satisfied, you will be making a GST-free supply when you supply the nurse call pendant device to be used in hospitals and nursing homes.

Fall out mat

In this case, the fall out mat is specifically designed for patients that need monitoring and have a habit of falling from bed. The mat has an in built pressure sensor and has two functions: (1) to give the patient a soft landing when falling from bed; and (2) call the nurse call system to let the nurse know that the patient has fallen from or rolled out of bed. It will continue to call the nurse until a nurse arrives to assist with the patient's specific medical needs and a cancel button is pushed, thus avoiding prolonged periods of time on the floor.

Therefore, it is considered that the fall out mat is a 'medical alert' device and is covered by Item 33.

Furthermore, the fall out mat is specifically designed for people with an illness or a disability and is not widely used by people without an illness or a disability. It is mainly used by high care nursing home patients who may find themselves in an emergency situation.

As all the requirements of subsection 38-45(1) of the GST Act are satisfied, you will be making a GST-free supply when you supply the fall out mat device to be used by patients in hospitals and nursing homes.