Edited version of private advice

Authorisation Number: 1051902167507

Date of advice: 23 September 2021

Ruling

Subject: GST and home care

Question

Is the supply of home care services by you to:

(a) Ms X, and

(b) Ms Y,

a GST-free supply?

Answer

No

Relevant facts and circumstances

You carry on an enterprise and are registered for GST. Relevantly your activities consist of providing in-home aged care and disability care to clients.

This private ruling considers services you provide to two clients (care recipients) being Ms. X and Ms. Y.

Ms X and Ms Y are considered either aged and/or a disabled person

Ms. X is a recipient of a Commonwealth Funding from a different provider (not you). However, the funding received by Ms. X is insufficient to meet her needs.

Ms. X needs to acquire additional services, otherwise she may be at risk of prematurely or inappropriately needing long term care in a hospital or other institution.

You provide additional service to Ms X. The additional services consist of providing food; transport for shopping trips, social outings and for health-related purposes.

Currently there is no government funding for the services provided by you so Ms. X is paying out of pocket for the above additional service.

Ms. Y has a Home Care Package with another provider (not you).

The service provided by you is respite care and social support during periods where her daughter cannot be in attendance.

You invoice Ms. Y directly and Ms. Y submits that invoice to her Home Package Provider to get reimbursed from the package.

The services provided by you to Ms. Y is unable to be provided by her other service provider which is why Ms. Y employs you.

Relevant legislative provisions

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

Reasons for decision

Section 38-30 of the GST Act states:

38-30 Home care etc.

(1)    A supply of *home care is GST-free if home care subsidy is payable under Part 3.2 of the Aged Care Act 1997 or Part 3.2 of the Aged Care (Transitional Provisions) Act 1997 to the supplier for the care.

(2)    A supply of care is GST-free if the supplier receives funding under the Home and Community Care Act 1985 in connection with the supply.

(3)    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 people; 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.

(4)    A supply of care is GST-free if:

(a)         the supplier receives funding from the Commonwealth, a State or a Territory in connection with the supply; and

(b)         the supply of the care is of a kind determined in writing by the *Aged Care Minister to be similar to a supply that is GST-free because of subsection (2).

It follows that the supply of home care may be a GST-free where certain requirements are met. Relevantly for government funded home care this may arise where the home care subsidy or government funding is payable to the supplier (i.e. you) for the care.

In this case you do not receive any funding directly from government and therefore do not meet the requirements for a GST-free supply of government funded home care. However, the supply you make may be GST-free where it satisfies the conditions as non-government funded home care.

In the case of non-government funded home care this will be GST-free where:

•         You make the supply to an aged or disable person and

•         The service is of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles.

In this case your supply of services is made to and aged and/or disable person, however the supplies that you make do not fall within the kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles.

Consequently, your supply of services to Ms. X and Ms. Y are not GST-free.