Edited version of your written advice

Authorisation Number: 1012785635174

Ruling

Subject: Goods and services tax (GST) and care services

Question 1

Are the care services you provide to an individual person using a third party to manage their funding taxable supplies?

Answer

No

Question 2

Are the care services you provide to an individual receiving direct payments purchasing services directly from you taxable supplies?

Answer

Your supplies may be a mixed supply of GST-free home care under subsection 38-30(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and taxable supplies under section 9-5 of the GST Act where the services are not listed in Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles.

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 government funded entity register for goods and services tax (GST).

• You are an endorsed charitable organisiation and a gift deductible recipient.

• You receive state funding under the Disability Services Act 2006 (DAS), and State funding to provide services to individual people and people in programs and federal funding from to provide services to people in programs.

• Under a program you provide services to people using third parties, who receive and manage the person's funds and purchase services from you. You invoice the third party for payment.

• You propose to enter into an agreement with a Government department to provide services as a Provider for a program for people with individual funding and deliver services to the person.

• You also propose to enter into an agreement with a Government department to provide services as a Provider for a program for people with individual funding and purchase services from other organisations. They will invoice you.

• You also propose to provide services to people funded under a program receiving direct payment from a Government department into their bank accounts and purchasing services from you. You will invoice the person directly for payment.

• For the program where the individual purchases direct services from you, you advise:

• The services are prescribed as part of the client's Individual Support Plan and Daily Support Plan.

• The client does not live in a nursing home.

• You provide personal assistance to the client each week, predominantly in the client's home and also in the community.

• You do not receive government funding to provide the services, the client receives the funding.

• The client is funded under the State government's program.

• You raise the invoice for the supply of services with the client's name as the customer.

• You provide health specialist services to people with disabilities or distress living in the community.

• The services you provide consist of:

• Individual in-home living support and or developmental programming services including assistance with shopping banking, budgeting, meal preparation, dressing, transferring etc.

• Support for the basic living needs to support the person to live in their own residence.

• Learning and Life skills, on-going day-to-day support to access and participate in community based activities, flexible and responsive to personal needs and interests. This ranges from educational to leisure and recreational pursuits

• The care services focus is on education to develop skills and independence in life areas, self-help, literacy, numeracy.

• Respite for short-term and time-limited break for families and other voluntary care givers provided in the person's own home location.

Relevant legislative provisions

All references are to the A New Tax System (Goods and Services Tax) Act 1999:

Section 9-5

Section 38-30

Section 38-40

Section 195-1

Reasons for decision

Question 1

Summary

You are making a GST-free supply under subsection 38-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Detailed reasoning

The supply of a Specialist Disability Service will be GST-free under Subdivision 38-B if it satisfies the requirement of section 38-40. This section states:

38-40 Specialist disability services

A supply of services is GST-free if the supplier receives funding under the Disability Services Act 1986 or under a complementary *State law or *Territory law in respect of the services.

For the purposes of interpreting the GST Act, section 182-1 states that the headings to sections and subsections form part of the Act. Whilst the section itself does not limit the type of supply that would be GST-free, as the heading to the section refers to "Specialist disability services" it is considered that the supply must be of Specialist Disability Service to be GST-free.

The specialist disability services that are GST-free pursuant to section 38-40 of the GST Act are only those for which the supplier receives funding under the Disability Services Act 1986 (Cth) or a complementary State law or Territory law. For the purposes of section 38-40, it is accepted that the Disability Services Act 2006 (Qld) is a complementary State law to the Disability Services Act 1986 (Cth).

Accordingly, it is by reference to supplies, or the components of those supplies, for which funding is provided that will determine whether the supply satisfies section 38-40.

The Disability Services Act 2006 (Qld) provides a definition of disability services as:

Disability services, for people with a disability, means 1 or more of the following-

(a) accommodation support services;

(b) respite services;

(c) community support services;

(d) community access;

(e) advocacy or information services or services that provide alternative forms of communication;

(f) research, training or development services

Section 3 of the Disability Services Act 1986 makes it clear that specialist disability services are services that, among other things, assist disabled persons to integrate into the community, and that seek to achieve positive outcomes for the disabled such as independence, employment opportunities, etc. Section 9 of that Act states that the Minister can provide approval of funding for a variety of services for people with disabilities, such as accommodation, support services, recreation services, transport services, etc. Any such services will be specialist disability services if the services are provided for people with disabilities.

Section 9 of that Act states that the Minister can provide approval of funding for a variety of services for people with disabilities, such as accommodation, support services, recreation services, transport services, etc. Any such services will be specialist disability services if the services are provided for people with disabilities. [Emphasis added]

As the provision of your supplies falls within the meaning of Specialist Disability Services then these services are GST-free under Division 38 of the GST Act.

Question 2

Summary

Your supplies may be a mixed supply of GST-free home care under subsection 38-30(3) of the GST Act and taxable supplies under section 9-5 of the GST Act where the services are not listed in Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles.

Detailed reasoning

Subsection 38-30(3) of the GST Act states:

A supply of *home care is GST-free if the supply is of services:

(a) that are provided to one or more aged or disabled peoples; and

(b) 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.

Section 195-1 of the GST Act provides that home care means home care as defined in section 45-3 of the Aged Care Act 1997.

Section 45-3 of the Aged Care Act 1997 states that home 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. Residential care is care provided to a person who is in a nursing home.

The services covered by item 2.1 of Part 2 of Schedule 1 to the Quality of Care Principles (item 2.1) are:

Services of the kind listed in paragraphs (a) to (f) in item 2.1 are covered by paragraph 38-30(3)(b) of the GST Act.

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.

You advise the services you provide consist of:

• Individual in-home living support and or developmental programming services including assistance with shopping banking, budgeting, meal preparation, dressing, transferring etc.

• Support for the basic living needs to support the person to live in their own residence.

• Learning and Life skills, on-going day-to-day support to access and participate in community based activities, flexible and responsive to personal needs and interests. This ranges from educational to leisure and recreational pursuits

• The care services focus is on education to develop skills and independence in life areas, self-help, literacy, numeracy.

• Respite for short-term and time-limited break for families and other voluntary care givers provided in the person's own home location.

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.