ATO ID 2005/41: GST and supply of care services to a person who lives in supported accommodation
Date of decision: 15 September 2004
Business line: Indirect Tax

Issue
Is the entity, a supplier of care services, making a GST-free supply under subsection 38-30(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it is funded for and supplies one of the services listed in Schedule 1 to the GST-free Supply (Care) Determination 2000 (Care Determination), to a client who lives in supported accommodation?

Decision
Yes, the entity is making a GST-free supply under subsection 38-30(4) of the GST Act when it is funded for and supplies one of the services listed in Schedule 1 to the Care Determination, to a client who lives in supported accommodation.

Facts
The entity is a supplier of care services. The entity supplies services that are listed in Schedule 1 to the Care Determination. The entity supplies these services to a young client who suffers from a disability. The entity receives payment for its services from funds that are sourced from the relevant State Government budget. The entity is not contracted by a government entity or any business entity to provide these services to the client. The client is not living in long term care in a hospital or other institution, is not in receipt of residential care within the meaning of the Aged Care Act 1997 and is not currently in receipt of residential care pursuant to subsection 38-25(2) or subsection 38-25(3) of the GST Act. The client lives in supported accommodation, whereby they live independently in the community in shared accommodation, but require assistance with daily living activities from attendant carers. If the client did not receive these services, they would be at risk of prematurely needing long term care in a hospital or other institution. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: Subsection 38-30(4) of the GST Act provides that a supply of care is GST-free if: For the purposes of subsection 38-30(4) of the GST Act, it is considered that a payment constitutes 'funding from the Commonwealth, a State or a Territory' if the funds are sourced from Commonwealth, State or Territory budgets under a government-funded care program. The entity receives payment for its services from funds that are sourced from the relevant State Government budget under a government-funded care program and as such, the first requirement of subsection 38-30(4) of the GST Act is satisfied. The second requirement of subsection 38-30(4) of the GST Act requires that 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 38-30(2) of the GST Act. Clause 4 of the Care Determination provides that the supply of care of a kind mentioned in Schedule 1 to the Care Determination to a 'targeted person' is similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act. The term 'targeted person' is defined in the Care Determination to mean a frail, older person or a younger person who: The entity provides its services to a young client who suffers from a disability. If the client did not receive these services, they would be at risk of prematurely needing long term care in a hospital or other institution. As such, it remains to be determined whether the client 'lives at home'. A person 'lives at home' when they are living in the community but are not in long term care provided in a hospital or other institution or through a residential care service within the meaning of the Aged Care Act. For the purposes of the Care Determination, a person does not have to live in their private home to satisfy the requirement that they live at 'home'. The entity is supplying services to a client who lives in supported accommodation. Although they require assistance with daily living activities and do not live in their own private home, they do live independently in the community in shared accommodation. They are not living in long term care provided in a hospital or other institution or in long term care provided through a residential care service within the meaning of the Aged Care Act. As such, the client meets the definition of a 'targeted person' as provided in the Care Determination. The services that the entity supplies to the client are listed in Schedule 1 to the Care Determination. Therefore, the entity is supplying services of a kind determined in writing by the Aged Care Minister to be similar to a supply that is GST-free because of subsection 38-30(2) of the GST Act and the second requirement of subsection 38-30(4) of the GST Act is satisfied. The entity is making a GST-free supply under subsection 38-30(4) of the GST Act when it supplies one of the services that is listed in Schedule 1 to the Care Determination, to a client who lives in supported accommodation.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 38-30 subsection 38-30(2) subsection 38-30(4) paragraph 38-30(4)(a) paragraph 38-30(4)(b)
Other references: GST-free Supply (Care) Determination 2000, Schedule 1
Subject references: Goods and services tax GST free GST health Section 38-30 - community care