Edited version of private advice

Authorisation Number: 1012621355011

Ruling

Subject: GST and supply of services to a disabled person in your home

Question

Is your supply of services to a disabled person in your home a GST-free supply?

Advice

Based on the information received, some of the caring services that you provide to the disabled person in your home are listed in Item 2.1 (daily living activities assistance) of part 2 of schedule 1 to the quality of Care principles (Item 2.1). In this instance the supply of the services listed in Item 2.1 is GST-free under subsection 38-30(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Where the services are not listed in Item 2.1 the supply of these services is a taxable supply under section 9-5 of the GST Act.

You will need to apportion the consideration received between the component that is taxable and the component that is GST-free.

Relevant facts

You have provided care services to a disabled person from the date of their injury. You received payment for your caring services to the disabled person and also receive as compensation for your services and household use, a weekly fuel allowance, weekly household expenses and fortnightly garden maintenance.

You provide direct personal care services to the disabled person in your home. The caring services consist of daily living activities including but not limited to personal assistance, including individual attention, supervision and physical assistance with bathing and personal hygiene, assisting with continence management, eating and dressing. You advised these services 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 1997.

You also provide additional services to the disabled person on a daily basis including preparing and cooking their meals, washing and ironing their clothes, shopping, monitoring and issuing medication and driving them to medical appointments. You do not receive any rental payment for the accommodation you provide to the disabled person.

You do not receive any funding under the Aged Care Act 1997, or the Home and Community Care Act 1985 (HACC), or the Disability Services Act 1986 or any other form of Government funding in relation to the supply of these services.

You are not a registered nurse or a recognised professional of a kind listed in subsection 38-10(1) of the GST Act.

You are registered for the goods and services tax (GST).

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 Subsection 38-10(1)

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-25(3)

A New Tax System (Goods and Services Tax) Act 1999 Subsection 38-30(3)

Reasons for decision

Detailed reasoning

GST is payable on a taxable supply. Under section 9-5 of the GST Act, you make a taxable supply if:

a. you make the supply for consideration;

b. the supply is made in the course or furtherance of an enterprise that you carry on;

c. the supply is connected with Australia; and

d. you are registered or required to be registered for GST.

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

Based on the information received, you satisfy paragraphs 9-5(a) to 9-5(d) of the GST Act when supplying the services to the disabled person in your home as:

a. you make the supplies for consideration;

b. the supplies are made in the course of an enterprise that you carry on;

c. the supplies are connected with Australia as they are done through an enterprise that you carry on in Australia; and

d. you are registered for GST.

However, the supplies of these services are taxable supplies to the extent that they are not GST-free or input taxed. There is no provision under the GST Act that will make these supplies of services input taxed.

The next step is to examine whether these supplies are GST-free and therefore excluded from being taxable supplies.

GST-free supplies

Division 38 of the GST Act sets out the supplies that are GST-free. If a supply is GST-free then no GST is payable on the supply and an entitlement to an input tax credit for anything acquired or imported to make the supply is not affected.

Relevant to the supplies of services you make are subsections 38-10(1), 38-25(3) and 38-30(3) of the GST Act. We will now consider whether any of the supplies of services satisfies all the requirements in any of the relevant subsections.

Subsection 38-10(1) of the GST Act

Subsection 38-10(1) of the GST Act is about supply of other health services. For subsection 38-10(1) of the GST Act to apply the service:

i. must be of a kind specified in the table in subsection 38-10(1) of the GST Act; and

ii. the supplier must be a recognised professional (as defined in section 195-1 of the GST Act), in relation to the supply of services of that kind; and

iii. the supply must be generally accepted in the relevant profession as being necessary for the appropriate treatment of the recipient of the supply (as defined in section 195-1 of the GST Act).

You have advised that you are not a recognised professional of a kind listed in subsection 38-10(1) of the GST Act when you supply your services. Accordingly, the supply of the services is not GST-free under subsection 38-10(1) of the GST Act.

Subsection 38-25(3) of the GST Act

Section 38-25 of the GST Act provides for the supply of residential care services made by a government funded and non-government funded supplier to be GST-free.

The supply of residential care services to an aged or disabled person by a non-government funded supplier is GST-free under subsection 38-25(3) of the GST Act 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.

From the facts given, you do not receive any consideration for the accommodation you provide to the disabled person. Accordingly, the supply of services will not be GST-free under subsection 38-25(3) of the GST Act.

Subsection 38-30(3) of the GST Act

Section 38-30 of the GST Act provides for the supply of community care services to be GST-free.

The supply of community care services to an aged or disabled person, by a non-government funded supplier is GST-free under subsection 38-30(3) of the GST Act to the extent that the services 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 (Item 2.1).

Item 2.1 appears as follows:

Part 2          Care and services - to be provided for all residents who need them

Services that are not covered by Item 2.1 include:

• Assistance with housework;

• Assistance with gardening;

• Meal preparation services;

• Grocery shopping for individuals;

• Monitoring medication;

• Rehabilitation services;

• Assistance with writing cheques, letters and so on;

• Advocacy services;

• Provision of social and community activities such as providing companionship, craft and reading activities to individuals, and

• Driving individuals to and from appointment.

From the information received, some of the services you make are listed in Item 2.1. In this instance the supply of the services that are listed in item 2.1 is GST-free under subsection 38-30(3) of the GST Act.

Where the services are not listed in Item 2.1 the supply of these services is a taxable supply under section 9-5 of the GST Act.

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.