Edited version of private advice

Authorisation Number: 1051603610463

Date of advice: 19 December 2019

Ruling

Subject: GST and the supply of non-government funded home care services

Question

Is the supply, of a non-government funded package of home care services (the services) by you to an aged or disabled person in their own home a GST-free supply of home care under subsection 38-30(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

To the extent the supply of the services by you to an aged or disabled person in their home involves providing personal assistance including attention, supervision and physical assistance with a daily living activity of a kind covered by item 2.1 (daily living activity assistance) of Part 2 of the Quality of Care Principles (Item 2.1 of the QCP) the services are GST-free under subsection 38-30(3) of the GST Act.

To the extent the supply of the services by you to an aged or disabled person in their home does not involve providing assistance with a daily living activity of a kind covered by Item 2.1 of the QCP (such as hairdressing, housework, gardening, preparing meals or grocery shopping, monitoring medication, rehabilitation, help with writing letters, advocacy services, accommodation, driving people to and from appointments or social activities and social and community activities etc), the services are not GST-free under subsection 38-30(3) of the GST Act to that extent. The supplies of the services are taxable supplies where the requirements of section 9-5 of the GST Act are satisfied.

Relevant facts and circumstances

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

You operate an enterprise which involves making supplies of care and support services.

You have entered into a written agreement with private clients where you supply a package of home care services to that aged or disabled persons in their own home.

You have described some of the services in the package as involving providing personal assistance with daily living activities of a kind covered in Item 2.1 of the QCP whilst others are described as not involving providing personal assistance with those daily living activities of a kind covered in Item 2.1 of the QCP.

You do not receive funding from the Commonwealth or a State or a Territory or a local government in connection with the supply of home care services you provide to private clients that are aged or disabled.

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 Section 38-30

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

Reasons for decision

Section 38-30 of the GST Act provides that the supply of home care services is GST-free in certain circumstances.

Home Care Services (non-government funded)

As you do not receive government funding in relation to the services you supply to private aged and disabled clients consideration is given to the application of subsection 38-30(3) of the GST Act which provides the supply of home care is GST-free if the supply is of services that;

• are provided to one or more aged or disabled people and
• are of a kind covered by Item 2.1 of the QCP.

'Home care' is defined in section 195-1 of the GST Act to have the meaning given by section 45-3 of the Aged Care Act 1997 (AC Act). Section 45-3 of the AC Act defines 'home care' as

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. The Subsidy Principles may specify care that constitutes home care for the purposes of the AC Act or does not constitute home care for the purposes of this Act.

As the care you provide to private clients consists of a package of personal care services and other personal assistance to aged or disabled people in their own home those services meet the definition of 'home care'.

The QCP are defined in section 195-1 of the GST Act to mean the principles made under section 96-1 of the AC Act. See the link to the register of federal legislation for the QCP below https://www.legislation.gov.au/Details/F2016C00451/Download

Section 96-1 of the AC Act provides that

The Minister may, by legislative instrument, make Principles, specified in the second column of the table, providing for matters:

• required or permitted by the corresponding Part or section of this Act specified in the third column of the table to be provided; or
• necessary or convenient to be provided in order to carry out or give effect to that Part or section.

Item 2.1 of the QCP covers services which involve personal assistance, including individual attention, individual supervision, and physical assistance with the following daily living activities:

(a)  bathing, showering, personal hygiene and grooming;

(b)  maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management;

(c)  eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary);

(d)  dressing, undressing, and using dressing aids;

(e)  moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids;

(f)   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.

The Commissioner provides examples in its publication entitled 'GST and home care' https://www.ato.gov.au/business/gst/in-detail/your-industry/gst-and-home-care/ (Publication) of those home care services that are not funded and are not GST-free:

• hairdressing
• housework and gardening
• preparing means and grocery shopping for individuals
• aids, appliances and monitoring medication; however, they may be GST-free health supplies under a different section of the GST Act
• rehabilitation and health care services, however, these may be GST-free health supplies under a different section of the GST Act
• help with writing cheques, emails and letters
• advocacy services
• accommodation
• driving individuals to and from appointments and social activities
• social and community activities, such as providing companionship, craft and reading activities to individuals.

The Publication explains that if you supply social and community activities, it is not GST-free non-government funded home care. However, a supply of GST-free non-government funded home care at a social or community activity is GST-free. The following example is provided to illustrate the difference between a service which involves assisting a person and a service of providing social support:

Example - Assisting a person versus engaging in a social activity

Personal Care Pty Ltd provides care services for residents at Happiness Nursing Home. They provide social outings to lawn bowls and care support for the bowlers.

Their employee, Jan, helps a resident play lawn bowls by helping her to walk, standing beside her and steadying her while she rolls the bowls. This supply is GST-free non-government funded home care as Jan is providing mobility assistance to the care recipient.

Their employee, Errol, drives the residents to lawn bowls and plays with the residents, ensuring everyone is included and has an enjoyable day. This supply is not GST-free non-government funded home care as Errol is providing transport and social support which is not in the list of GST-free non-government funded home care services.

Are the home care services provided to aged or disabled people?

With regards to the first requirement of subsection 38-30(3) of the GST Act you have entered into an agreement with a private client to provide a package of services in their own home. Those private clients are aged or disabled people. As such the first requirement of subsection 38-30(3) of the GST Act is satisfied.

Are some of the home care services of a kind covered by Item 2.1 of the QCP?

With regards to the second requirement of subsection 38-30(3) of the GST Act, you have broadly described the services and the activities involved in providing those services.

To the extent the supply of a service by you to an aged or disabled person in their own home involves providing personal assistance with a daily living activity of a kind covered Item 2.1 of the QCP such as bathing, personal hygiene, maintaining continence, eating, dressing, moving, communicating etc the service is GST-free under subsection 38-30(3) of the GST Act. On the facts provided some of your services to aged or disabled persons involves providing personal assistance with a daily living activity of a kind covered Item 2.1 of the QCP. Accordingly those services are GST-free under subsection 38-30(3) of the GST Act.

Are some of the home care services not of a kind covered by Item 2.1 of the QCP?

To the extent that a service provided to an aged or disabled person in their own home does not involve providing personal assistance with daily living activities of a kind covered by Item 2.1 of the QCP the service is not GST-free under subsection 38-30(3) of the GST Act. On the facts provided some of the services you provide to aged or disabled persons do not involve providing personal assistance with a daily living activity of a kind covered Item 2.1 of the QCP. Accordingly those services are not GST-free under subsection 38-30(3) of the GST Act to the extent they do not involve personal assistance with a daily living activity covered by Item 2.1 of the QCP.

The Publication identifies services involving hairdressing, housework, gardening, preparing meals or grocery shopping, monitoring medication, rehabilitation, help with writing letters, advocacy services, accommodation, driving people to and from appointments or social activities and social and community activities as examples of non-government funded home care services that do not satisfy the second requirement subsection 38-30(3) and are, accordingly, not GST-free.

To the extent that the services in the package of home care services you supply to aged or disabled people satisfy the requirements of section 9-5 of the GST Act they are taxable supplies.