ATO ID 2002/36: GST and monitoring of medical alert devices
Date of decision: 13 July 2001
Business line: Indirect Tax

Issue
Is the entity, a community care provider, making a GST-free supply under subsection 38-30(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) , when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the Home and Community Care Act 1985 (HACC Act) in connection with that supply?

Decision
Yes. The entity is making a GST-free supply under subsection 38-30(2) of the GST Act when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the HACC Act in connection with that supply .

Facts
The entity is a community care provider and is registered for goods and services tax (GST). The entity has a client, an individual care recipient, who requires a medical alert device and associated monitoring services. The supply of the medical alert device is GST-free under subsection 38-45(1) of the GST Act (see ATO ID 2001/509). The entity supplies the monitoring services to the individual care recipient under an arrangement whereby the actual monitoring of the medical alert device is performed by a monitoring company on behalf of the entity. There is no contractual relationship between the individual care recipient and the monitoring company The monitoring company charges an amount to the entity for the monitoring services it supplies to the entity. The entity charges an amount to the individual care recipient for the monitoring services that it supplies to the individual care recipient. The entity receives funding under the HACC Act to supply medical alert devices and monitoring services to people who are living at home and are frail or have a moderate or severe disability.

Reasons for decision
Summary: Subsection 38-30(2) provides that a supply of care is GST-free if the supplier receives funding under the HACC Act in connection with the supply. The entity receives funding under the HACC Act to supply medical alert devices and monitoring services to people who are frail or who have a moderate or severe disability, and are living at home. As the entity receives funding under the HACC Act for the provision of the monitoring services, it is receiving funding in connection with the supply. Therefore the entity is making a GST-free supply under subsection 38-30(2) of the GST Act when it supplies the services of monitoring a medical alert device to an individual care recipient and it receives funding under the HACC Act in connection with that supply.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 38-30(2) subsection 38-45(1)
Related public rulings and determinations: Goods and Services Tax Ruling GSTR 2006/9
Related ATO interpretative decisions: ATO ID 2001/509
Subject references: Goods & services tax GST free GST health Section 38-30 - community care