Edited version of private advice

Authorisation Number: 1052295725596

Date of advice: 16 September 2024

Ruling

Subject: GST and NDIS specialist disability accommodation

Question 1

Is Entity A's supply of specialist disability accommodation (SDA) to a participant of the National Disability Insurance Scheme (NDIS) GST-free under section 38-38 of the A New Tax System (Goods and Service Tax) Act 1999 (GST Act)?

Answer 1

Yes, Entity A's supply of SDA to a NDIS participant is GST-free under section 38-38 of the GST Act.

Question 2

Can Entity A claim input tax credits for acquisitions made under section 11-20 of the GST Act in relation to the supply of SDA to NDIS participants?

Answer 2

Yes, Entity A is entitled to claim input tax credits for the GST included in creditable acquisitions made in relation to providing SDA to NDIS participants, provided Entity A holds a valid tax invoice.

This ruling applies for the following period:

DD MM YYYY to DD MM YYY

Relevant facts and circumstances

Entity A is registered for GST.

Entity A acquires and leases properties to people with a disability in Australia. Entity A purchased properties for the purpose of leasing theses to participants of the NDIS as SDA.

SDA is one of the supports that may be funded by the NDIS to provide housing solutions to people with an extreme functional impairment or very high support needs. SDA is a capital support that must be specified in a participants plan and cannot be used for another purpose.

Entity A is a registered NDIS provider with the NDIS Quality and Safeguards Commission (NDIS Q&SC), approved under the SDA registration group.

The properties are enrolled with the NDIS Q&SC (SDA properties).

Entity A supplies the SDA supports NDIS participants', entering into a written service agreement with the participants (referred to as the SDA Agreement).

The SDA Agreement identifies the name of the NDIS participant and their representative (if necessary), as well as the property.

The SDA Agreement provides that Entity A will the receive SDA payments and a reasonable rent contribution from the participant for the provision of the SDA support.

Entity A also enters into a residential tenancy agreement with the NDIS participant, subject to the laws of the relevant State or Territory.

The NDIS participants' plans include SDA as a stated capital support.

Entity A obtains copies of the NDIS participant's plan to confirm:

•                whether the NDIS participant's plan is in effect

•                whether the plan includes SDA as a reasonable and necessary support, and

•                the maximum amount of funding available for the participant for SDA.

Entity A incur expenses in providing SDA to NDIS participants, including costs:

•                to maintain the property

•                associated with required audits and compliance, such as fire-safety and NDIS audits, and

•                for the ongoing use of the properties, such as the operation of automatic doors.

Relevant legislative provisions

A New Tax System (Goods and Service Tax) Act 1999 section 11-5

A New Tax System (Goods and Service Tax) Act 1999 section 11-15

A New Tax System (Goods and Service Tax) Act 1999 section 11-20

A New Tax System (Goods and Service Tax) Act 1999 section 29-10

A New Tax System (Goods and Service Tax) Act 1999 section 29-70

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

A New Tax System (Goods and Service Tax) Act 1999 subsection 177-10(5)

Reasons for decision

Question 1

Is Entity A's supply of SDA to a NDIS participant GST-free under section 38-38 of the GST Act?

Summary

Yes, Entity A's supply of SDA to a NDIS participant is GST-free under section 38-38 of the GST Act.

Detailed reasoning

Subdivision 38-B of the GST Act sets out the supplies relating to health that are GST-free where certain requirements are satisfied.

Section 38-38 of the GST Act provides that a supply of a disability support to a NDIS participant will be GST-free if the supply:

(a) is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013) for whom a participant's plan is in effect under section 37 of that Act; and

(b) is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and

(c) is made under a written agreement, between the supplier and the participant or another person, that:

(i) identifies the participant; and

(ii) states that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant's plan; and

(d) is of a kind that the Disability Services Minister has determined in writing.

All of these requirements must be satisfied for a supply to be GST-free.

Supply to a participant with a plan in effect

To satisfy paragraph 38-38(a) of the GST Act, the supply must be made to a NDIS participant who has a plan in effect under section 37 of the National Disability Insurance Scheme Act 2013 (NDIS Act).

Before supplying the SDA support to NDIS participants, Entity A obtains a copy of the NDIS participants' plans to confirm whether they have plans in effect. Entity A makes a supply of SDA to NDIS participants who have a NDIS plan in effect.

Therefore, paragraph 38-38(a) of the GST Act is satisfied.

A supply of a reasonable and necessary support

To satisfy paragraph 38-38(b) of the GST Act, the supply Entity A make must be of a reasonable and necessary support that is specified in the statement of supports included in the participant's plan under subsection 33(2) of the NDIS Act.

Entity A obtains a copy of the NDIS participants' plans to confirm that the plan includes SDA as a reasonable and necessary support.

Entity A supplies SDA supports to these participants. The properties are SDA enrolled dwellings and have been specialised to provide accommodation to people with an extreme functional impairment or very high support needs.

For the purposes of paragraph 38-38(b) of the GST Act, the reasonable and necessary support of SDA is specified in the participant's plan.

Notwithstanding the fact that the NDIS does not provide funding for the reasonable rent contribution that may be paid by the participant for SDA as permitted under the National Disability Insurance Scheme (Specialist Disability Accommodation) Rules 2020 (SDA Rules),[1] we consider that Entity A is making a supply of a reasonable and necessary support of SDA.

Therefore, paragraph 38-38(b) of the GST Act is satisfied.

Made under a written agreement between the supplier and participant

To satisfy paragraph 38-38(c) of the GST Act, Entity A must have a written agreement with the participant or their representative that identifies the participant and states that the supply is of a reasonable and necessary support specified in the statement of supports in the participant's plan.

Subsection 36(1) of the SDA Rules also requires a registered SDA provider to have a written service agreement with the NDIS participant.

Entity A enters into an SDA Agreement with the participants for the provision of the SDA. The SDA Agreement identifies the name of the NDIS participant and their representative (if necessary) and provides that Entity A will supply SDA to the participant. A copy of the NDIS participant's plan is required to be attached to the SDA Agreement which evidences that Entity A's supply of SDA is of a reasonable and necessary support specified in the statement of supports in the participant's plan. Entity A enters into tenancy agreements with the participants.

Therefore, paragraph 38-38(c) of the GST Act is satisfied.

A supply of a kind covered by the Disability Services Minister's Determination

Paragraph 38-38(d) of the GST Act requires the supply to be of a kind determined in writing by the Disability Services Minister.

The A New Tax System (Goods and Services Tax) (GST-free Supply - National Disability Insurance Scheme Supports) Determination 2021 (NDIS Determination) was made under subsection 177-10(5) of the GST Act for the purposes of paragraph 38-38(d) of the GST Act.[2]

Subsection 6(1) of the NDIS Determination provides that a supply of a kind listed in the table under that subsection will satisfy paragraph 38-38(d) of the GST Act.

Item 1 of the table under subsection 6(1) of the NDIS Determination (Item 1) lists:

Specialist disability accommodation (within the meaning of the National Disability Insurance Scheme rules) and accommodation/tenancy assistance

'Specialist disability accommodation' is not defined under the NDIS Determination or the GST Act.

The Explanatory Statement to the New Tax System (Goods and Services Tax) (GST-free Supply - National Disability Insurance Scheme Supports) Determination 2021 provides:

The SDA Rules are part of the suite of legislation and legislative instruments that provide:[3]

•                criteria for when SDA will be included in a participant's plan

•                when a property will be enrolled to be used as SDA

•                the obligations on providers of SDA, and

•                the payments that will be paid to providers.

'Specialist disability accommodation' is defined under section 5 of the SDA Rules:

specialist disability accommodation:

(a) means accommodation for a person who requires specialist housing solutions, including to assist with the delivery of supports that cater for the person's extreme functional impairment or very high support needs; but

(b) does not include supports delivered to the person while the person is living in the accommodation.

Section 24 of the SDA Rules provides when SDA will be funded:

24 Requirements relating to the funding of specialist disability accommodation

(1) For specialist disability accommodation support specified in an eligible participant's plan to be funded under the National Disability Insurance Scheme, the following requirements must be satisfied:

(a) the specialist disability accommodation must be provided by an SDA provider;

(b) the accommodation must be provided at a dwelling (the SDA dwelling) that is enrolled to provide specialist disability accommodation (see Division 3 of this Part);

(c) the eligible participant must reside at the SDA dwelling (see section 32);

...

'SDA provider' is defined under section 5 of the SDA rules to mean:

(a) a registered NDIS provider that is registered to provide specialist disability accommodation; or

(b) a registered provider of supports that can provide specialist disability accommodation under its registration.

Entity A is a registered NDIS provider with the NDIS Q&SC, approved under the SDA registration group. The SDA properties are enrolled with the NDIS Q&SC. Entity A provides the SDA to NDIS participants who are eligible for supports of SDA. Accordingly, Entity A makes a supply of SDA which is covered by item 1 of the table under subsection 6(1) of the NDIS Determination.

Therefore, paragraph 38-38(d) of the GST Act is satisfied.

Accordingly, Entity A's supply of SDA will be GST-free under section 38-38 of the GST Act.

Conclusion

As Entity A has satisfied section 38-38 of the GST Act, their supply of SDA supports to NDIS participants will be GST-free. No GST is payable on Entity A's supply of SDA.

Question 2

Can Entity A claim input tax credits under section 11-20 of the GST Act for acquisitions made in relation to providing SDA to NDIS participants?

Summary

Yes, Entity A is entitled to claim input tax credits for the GST included in acquisitions made in relation to providing SDA to NDIS participants, provided Entity A holds a valid tax invoice. This is because these acquisitions are creditable acquisitions under section 11-5 of the GST Act.

Detailed Reasons

You are entitled to claim input tax credits for any creditable acquisitions that you make.[4]

Section 11-5 of the GST Act provides that you make a creditable acquisition if:

(a) you acquire anything solely or partly for a creditable purpose; and

(b) the supply of the thing to you is a taxable supply; and

(c) you provide, or are liable to provide, consideration for the supply; and

(d) you are registered, or required to be registered.

All the above requirements must be satisfied for the acquisition to be a creditable acquisition.

Section 11-15 of the GST Act provides the meaning of creditable purpose. You acquire a thing for a creditable purpose to the extent that you acquire the thing in carrying on your enterprise.[5] However, you do not acquire a thing for a creditable purpose to the extent that: [6]

(a) the acquisition relates to making supplies that would be input taxed; or

(b) the acquisition is of a private or domestic nature.

Entity A incurs expenses to provide and maintain the SDA properties that they deliver to NDIS participants, including costs:

•                to maintain the property

•                associated with required audits and compliance, such as fire-safety and NDIS audits, and

•                for the ongoing use of the properties, such as the operation of automatic doors.

These expenses are incurred in carrying on Entity A's enterprise. Entity A has provided, or is liable to provide, payment for these expenses and is registered for GST. Where the expenses incurred are a taxable supply to Entity A, they will meet all of the requirements under section 11-5 of the GST Act for the acquisitions to be creditable acquisitions.

Therefore, Entity A is entitled to claim input tax credits for the GST included in their creditable acquisitions, provided they hold a valid tax invoice.[7]

[1] See section 21 of the SDA Rules. The SDA Rules are made under section 209 of the NDIS Act for the purposes of sections 33, 34, 35, 48, 70, 72 and 73 of the NDIS Act.

[2] Subsection 177-10(5) of the GST Act provides that the Disability Services Minister may, by legislative instrument, make a determination for the purposes of paragraph 38-38(d) of the GST Act.

[3] This legislative framework includes The NDIS Act, NDIS (Specialist Disability Accommodation Conditions) Rule 2018 and NDIS (Specialist Disability Accommodation Conditions) Amendment Rules 2020.

[4] GST Act section 11-20.

[5] GST Act section 11-15(1).

[6] GST Act sections 11-15(2)(a)-(b).

[7] See GST Act subsections 29-10(3) and 29-70(1).