Private ruling: GST and home care services
Date of advice: 29 August 2018
Published: October 2018

Ruling: Q1: Is your supply of home care services to consumers GST-free where you receive Commonwealth Home Support Programme (CHSP) or Community Care Supports Program (CCSP) funding in connection with the supply? | A1: Yes, the supply of the home care service under the CHSP will be GST-free under subsection 38-30(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to the extent the services are of a kind covered by the GST-free Supply (Care) Determination 2017 . However, the supply will not be GST-free home care under subsection 38-30(4) of the GST Act for services in excess of that for which the CHSP funding relates unless: ● other government funding relates to the services; or ● the services are GST-free under subsection 38-30(3) as discussed in relation to question 2. Your supplies of social outings are not covered by the GST-free Supply (Care) Determination 2017 unless they are supplied by a Day Centre. Also, where a home visit is a companionship visit, the supply of the service will not be GST-free as companionship visits are not covered by the GST-free Supply (Care) Determination 2017 . Yes, the supply of the home care service under the CCSP will be GST-free under subsection 38-30(4) of the GST Act to the extent the services are of a kind covered by the GST-free Supply (Care) Determination 2017 . However, the supply will not be GST-free home care under subsection 38-30(4) of the GST Act for services in excess of that for which the CCSP funding relates unless: ● other government funding relates to the services; or ● the services are GST-free under subsection 38-30(3) as discussed in relation to question 2. Your supply of social outings are not covered by the GST-free Supply (Care) Determination 2017 unless they are supplied by a Day Care Centre. Also, where a home visit is a companionship visit, the supply of the service will not be GST-free as companionship visits are not covered by the GST-free Supply (Care) Determination 2017 . | Q2: Where you supply home care services of a kind covered by Item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the Quality of Care Principles (Item 2.1 daily living activities assistance) to a consumer and the services are not government funded to any extent, are the services GST-free? | A2: Yes. Non-government funded services supplied by you to consumers, that are of a kind covered by Item 2.1 daily living activities assistance are GST-free under subsection 38-30(3) of the GST Act. | Q3: Where you are engaged by another entity (a home care provider that is not an Australian government agency, an insurer or a compulsory third party scheme operator) to deliver home care services to that entity’s client, will your supply to that other entity be a GST-free supply? | A3: No, the supply to another entity is not a supply of home care services that is GST-free under subsection 38-30(3) of the GST Act nor is it GST-free under section 38-60 of the GST Act. Rather, it is a supply of contracted services that is taxable, if the further requirements of section 9-5 of the GST Act are met. If you receive a payment from the other entity’s client, this forms part of the consideration for the taxable supply that you make to the other entity. | Q4: Where you are engaged by another entity that is an Australian government agency, an insurer or a compulsory third party scheme operator to deliver home care services, will your supply to that other entity be a GST-free supply? | A4: Yes, your supply to the Australian government agency is GST-free under section 38-60(3) of the GST Act to the extent the services to the consumer are of a kind covered by: ● Item 2.1 daily living activities assistance and provided by you to an aged or disabled person, or ● the GST-free Supply (Care) Determination 2017 and provided by you to a targeted person, unless you have agreed with the other entity that the supply is not to be treated as a GST-free supply. Where you and the other entity agree to treat your supplies as taxable, these supplies are not GST-free, pursuant to 38-60(4) of the GST Act. Your supply under your arrangement with an insurer or a compulsory third party scheme operator is GST-free under section 38-60(1) or (2) respectively of the GST Act to the extent the services are of a kind covered by: ● Item 2.1 daily living activities assistance and provided by you to an aged or disabled person unless you have agreed with the other entity that the supply is not to be treated as a GST-free supply. Where you and the other entity agree to treat your supplies as taxable, these supplies are not GST-free, pursuant to 38-60(4) of the GST Act.

Relevant facts and circumstances: You are registered for GST. You are a Commonwealth Home Support Programme (CHSP) provider and receive funding from the Australian Government to provide care services to eligible persons through the CHSP. You are a Community Care Supports Program (CCSP) provider and receive funding from the NSW Government to provide care services to eligible persons through the CCSP. Commonwealth Home Support Programme (CHSP) You are a CHSP provider with a funding agreement with the Department of Health. You receive funding from the Australian Government to provide agreed amounts of specified services to persons aged 65 and over, for example 500 hours of domestic assistance. Each service has its unique code. You must proactively supply the services to eligible consumers. Consumers are requested to make a financial contribution. The government funding and the consumer contributions are pooled, with no separate sub accounts for each consumer. Your services are provided directly to consumers and you do not use third party providers. However, you may provide services to other providers. An individual is assessed by the Regional Assessment Service (RAS) and is determined to be eligible for specified quantities of the specified services. The individual will contact a service provider to acquire the services – not necessarily all from the one provider. Where you are selected as the service provider you are paid by submitting a claim detailing the unique identifier for the consumer (the individual), the code for the service and the quantity of the services provided. Community Care Supports Program (CCSP) You are a CCSP provider with a funding agreement with NSW Family & Community Services - Ageing, Disability and Health Care Division. You receive funding from the NSW Government to provide agreed amounts of specified services to targeted persons. The target group for assistance under the CCSP is younger people (people under 65 years of age and under 50 years of age for Aboriginal and Torres Strait Islander people) with a disability who require basic maintenance and support services and who are at risk of premature or inappropriate admission to long term residential care. Consumers are requested to make a financial contribution. The government funding and the consumer contributions are pooled, with no separate sub accounts for each consumer. People wishing to access CCSP funded services may be referred to the Program in a variety of ways, including through a self, carer or family member referral. An initial assessment to determine client eligibility and service requirements is generally followed by a service specific or comprehensive needs assessment. Assessment considers the person’s needs and factors such as the availability of informal care. Eligibility and support needs are assessed using standardised assessment tools, such as the Client Information and Referral Record (CIARR) or the NSW Ongoing Needs Identification tool (ONI-N). Where there is a carer, their needs are also considered. CHSP and/or CCSP services provided You provide the following care services: ● Home visits (transport and help with everyday tasks like reading and writing letters). ● Home help: ● Cleaning. ● Changing bedlinen and doing laundry. ● Delivered meals. ● Shopping by list (staff shop and deliver to consumer). ● Personal care (showering, dressing, toileting, shaving, hair care, assisting with mobility, helping to put on stockings, splints and callipers). ● Monitoring self-medication. ● Prompting to undertake a planned exercise program. ● Day centre activities: ● Meals ● Regular lawn mowing or one-off assistance with garden maintenance (yard and garden clean up or rubbish removal). ● Home maintenance (one off service) - minor repairs and maintenance to dwellings, basic carpentry, small painting jobs, and basic plumbing such as replacing washers and minor leaks. You provide the following care services to carers: ● Respite care: ● Carer Support Group (provides an opportunity for carers to come together and discuss their needs, experiences and listen to guest speakers). ● One-to-one respite which can be in-home, or out and about in the community.

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 38-60 | A New Tax System (Goods and Services Tax) Act 1999 Section 195

Reasons for decision: Detailed Reasoning - Commonwealth Home Support Programme and Community Care Supports Program: Section 38-30(4) provides: 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). The first requirement under subsection 38-30(4) is that the supplier receives government funding in relation to the respective supply, in this case the supply of Commonwealth Home Support Programme (CHSP) services and Community Care Supports Program (CCSP) services. The second requirement under subsection 38-30(4) is that the supply of care is of a kind determined in writing by the Aged Care Minister. The Aged Care Minister has made the GST-free Supply (Care) Determination 2017 (Care Determination). The Care Determination has two schedules: ● Schedule 1 in relation to a targeted person; and ● Schedule 2 in relation to a carer that substantially enables the carer to give care to a targeted person. The terms ‘care’, ‘carer’ and ‘targeted person’ are defined in the Care Determination: care means services to enable a targeted person to continue to live at home. carer means a person who provides care to a targeted person. targeted person means a frail, older person or a younger person who: (a) has a moderate, severe or profound disability (including addiction to a drug); and (b) lives at home; and (c) would, in the absence of services of the kind mentioned in Schedule 1, be at risk of prematurely or inappropriately needing: (i) long term care in a hospital or other institution; or (ii) residential care within the meaning of the Aged Care Act 1997 . | Detailed Reasoning - Care provided to targeted persons: Schedule 1 to the Care Determination lists the following items of care provided to targeted persons: | Detailed Reasoning - Service: 1 Home help 2 Personal care 3 Home maintenance 4 Home modification 5 Provision of food 6 Provision and delivery of meals at home or at a day care or similar centre 7 Respite care 8 Transport to and from day care or similar centres and for shopping trips, social outings and for health-related purposes 9 Community paramedical services 10 Community nursing 11 Assessment of the person’s care needs 12 Referral to other community care services 13 Training in the use of aids and appliances and in how to get the most out of the other services mentioned in this Schedule 14 Individual care planning or case management 15 Provision of basic equipment for social support, excluding the provision of aids and appliances under paragraph 7 (3) (b) of the Schedule to the Home and Community Care Act 1985 16 Day care 17 Linen services 18 Counselling 19 Community advocacy for a purpose mentioned in section 81-1 of the Aged Care Act 1997 20 Medication management 21 Provision and monitoring of personal alert systems 22 Provision of therapeutic supplies and services under the program known as the Psychogeriatric Unit Program administered by the Commonwealth 23 Continence management You will make a GST-free supply of care under section 38-30(4) when you supply the following care services to targeted persons, where they are of a kind listed in Schedule 1 to the Care Determination and you receive funding for the supply under your CHSP/CCSP Agreement: You provide the following care services: ● Home visits (transport and help with everyday tasks like reading and writing letters) - GST-free as it is covered by item 1 of the Care Determination (Home help). Note: Where the home visit is a companionship visit, the supply of the service will not be GST-free as companionship visits are not considered to be the provision of care. ● Home help: ● Cleaning - GST-free as it is covered by item 1 of the Care Determination (Home help). ● Changing bedlinen and doing laundry - GST-free as it is covered by item 1 of the Care Determination (Home help). ● Shopping by list (staff shop and deliver to consumer) - GST-free as it is covered by item 1 of the Care Determination (Home help). ● Delivered meals - GST-free as it is covered by item 5 of the Care Determination (Provision of food). ● Personal care (showering, dressing, toileting, shaving, hair care, assisting with mobility, helping to put on stockings, splints and callipers) - GST-free as it is covered by item 2 of the Care Determination (Personal care). ● Monitoring self-medication - GST-free as it is covered by item 20 of the Care Determination (Medication management). ● Prompting to undertake a planned exercise program - GST-free as it is covered by item 2 of the Care Determination (Personal care). ● Day centre activities: ● Meals - GST-free as it is covered by item 5 of the Care Determination (Provision of food). Note: Individual social outings will not be GST-free where they are not provided by a Day Care Centre. ● Regular lawn mowing or one-off assistance with garden maintenance (yard and garden clean up or rubbish removal) - GST-free as it is covered by item 3 of the Care Determination (Home maintenance). ● Home maintenance (one off service) - minor repairs and maintenance to dwellings, basic carpentry, small painting jobs, and basic plumbing such as replacing washers and minor leaks - GST-free as it is covered by item 3 of the Care Determination (Home maintenance). You will also make a GST-free supply under section 38-30(4) where you charge a Cancellation Fee, for example where a consumer gives insufficient notice that a service is not required, if the intended supply is GST-free. If you supply services in excess of that for which the government funding relates (for example, you receive government funding for a total of 500 hours of respite care for carers, but the services exceed the total of 500 hours), the supply of those excess services will not be GST-free home care unless other government funding relates to the services or the services are GST-free under subsection 38-30(3) as discussed in relation to question 2. | Detailed Reasoning - Care provided to carers: Schedule 2 to the Care Determination lists the following items of care provided to carers (a person who provides care to a targeted person): | Detailed Reasoning - Service: 1 Home help 2 Personal care 3 Home maintenance 4 Home modification 5 Provision of food 6 Provision and delivery of meals at home or at a day care or similar centre 7 Respite care 8 Transport to and from day care or similar centres and for shopping trips, social outings and for health-related purposes 9 Training in the use of services mentioned in Schedule 1 10 Provision of basic equipment for social support 11 Linen services 12 Counselling 13 Carer support 14 Community advocacy for a purpose mentioned in section 81-1 of the Aged Care Act 1997 15 Provision and monitoring of personal alert systems 16 Assessment of the person’s care needs 17 Referral to other community care services You will make a GST-free supply of care under section 38-30(4) when you supply the following care services to carers, where they are of a kind listed in Schedule 2 in the Care Determination and you receive funding for the supply under your CHSP/CCSP Agreement: ● Respite care: ● Carer Support Group (provides an opportunity for carers to come together and discuss their needs, experiences and listen to guest speakers) - GST-free as it is covered by item 7 of the Care Determination (Respite). ● One-to-one respite which can be in-home, or out and about in the community - GST-free as it is covered by item 7 of the Care Determination (Respite). If you supply services in excess of that for which the government funding relates (for example, you receive government funding for a total of 500 hours of respite care for carers, but the services exceed the total of 500 hours), the supply of those excess services will not be GST-free home care unless other government funding relates to the services or the services are GST-free under subsection 38-30(3) as discussed in relation to question 2. | Detailed Reasoning - Non-government subsidised/funded services: Subsection 38-30(3) states: 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. Part 2 of Schedule 1 of the Quality of Care Principles 2014 states the following items of daily living activities assistance (Item 2.1): | Detailed Reasoning - Content: 2.1 Daily living activities assistance Personal assistance, including individual attention, individual supervision, and physical assistance, with the following: (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. Excludes hairdressing. The GST and home care guidance on the ATO website (search for ‘QC 55890’ on the ATO website) lists examples of services that are not covered by Item 2.1: ● hairdressing ● housework and gardening ● preparing meals 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, they 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. Where you supply home care services of a kind covered by Item 2.1 daily living activities assistance directly to aged or disabled people the supply will be GST-free. There is no requirement in subsection 38-30(3) that the supplier receives a subsidy or funding from the government in respect of the care services you supply. Where you supply a package of ‘non-government funded/subsidised’ home care services that includes home care services of a kind not covered by Item 2.1 or that are not otherwise GST-free, then those items will generally be taxable. Where you supply a package of care that is partly GST-free and partly taxable, you will be making a mixed supply and it will be necessary to apportion between the GST-free and taxable amounts. Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts provides methods and examples that you may use to help you work out how to apportion the consideration for a supply that contains separately identifiable taxable and non-taxable parts. | Detailed Reasoning - Subcontracted service – entities other than Australian government agencies, insurers and compulsory third party scheme operators: Section 38-30 provides: (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). To satisfy these provisions, there must be a supply of ’care’ or ‘home care’. In the scenario being considered, you supply the service to Entity A of providing the stipulated services to the client of Entity A. ‘Home care’ is defined by reference to the GST Act and the Aged Care Act 1997 as care consisting of a package of personal care services and other personal assistance to be provided to a person who is not being provided with residential care. The term ‘care’ is defined to mean services, or accommodation and services, provided to a person whose physical, mental or social functioning is affected to such a degree that the person cannot maintain himself or herself independently. For the purposes of ‘care’ in subsections in subsections 38-30(2) and (4), it is considered that the definition in the Aged Care Act 1997 would be reflective of the meaning of care generally. As such, it is considered that a supply of ‘care’ or ‘home care’ must be made to an individual to support their physical, mental or social functioning. Although the definitions of ‘home care’ and ‘care’ referred to above use the term ‘provided’, we consider that the context of the provisions in the Aged Care Act 1997 shows that the term ‘provided’ is consistent with the term ‘supply’ in the GST Act. On this basis, ‘care’ or ‘home care’ is not supplied to an entity carrying on a business (Entity A) where the supply is a service of providing the home care services to an individual client of that entity (Entity A). In this instance, the entity carrying on the business (Entity A) is not being supplied with ‘home care’ by you. You will accordingly make a taxable supply to Entity A unless section 38-60 of the GST Act applies. If section 38-60 does not apply and assuming that Entity A is registered for GST and acquires the services from you in carrying on its enterprise, Entity A makes a creditable acquisition under section 11-5 of the GST Act from you for which it is entitled to an input tax credit. This view is consistent with paragraph 155 of Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies which states that: “Under the GST health provisions in Subdivision 38-B, subject to certain exceptions..., the supply is only GST-free where an individual receiving that service or specific health treatment is the recipient of that supply. This outcome results from the specific wording in some health provisions, whilst in other provisions it is due to the nature of the services themselves. This means that a GST-free supply of a health service cannot be made to a business entity or a non-profit body.” Further, in your circumstances, as Entity A is a home care provider that is not an Australian government agency, an insurer or a compulsory third party scheme operator, the supply will not be GST-free under section 38-60. Note: Section 38-60 in relation to services supplied to Australian government agencies, insurers and compulsory third party scheme operators is discussed in question 4. | Detailed Reasoning - Australian government agencies: Subsection 38-30(4) provides that 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). As explained in Question 1, the Aged Care Minister has made the GST-free Supply (Care) Determination 2017 (Care Determination). The Care Determination provides that for the purposes of paragraph 38-30(4)(b), the supply of care of a kind mentioned in Schedule 1 to a targeted person is similar to a supply that is GST-free because of subsection 38-30(2). It is administratively accepted that local governments (councils) are an Australian government agency. A payment from an Australian government agency (including another council) to you is funding for the purposes of this provision. However your supply to another Australian government agency is not ‘care’ as care can only be supplied to an individual. A business entity cannot be supplied with care. Therefore your supplies to another Australian government agency do not satisfy the requirements of subsection 38-30(4). However, subsections 38-60(3) and (4) state: | Detailed Reasoning - Government agencies: (3) If: (a) a supply is a supply of a service to an *Australian government agency; and (b) the service is the supplier making one or more other supplies of goods or services to an individual; and (c) at least one of the other supplies is wholly or partly *GST-free under this Subdivision; the first-mentioned supply is GST-free to the extent that the other supplies mentioned in paragraph (b) are GST-free under this Subdivision. | Detailed Reasoning - Parties may agree for supply not to be GST-free: (4) However, a supply is not GST-free (to any extent) under this section if the supplier and the *recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies. Where another Australian government agency contracts you to provide goods and/or services to one of their clients, you are making the supply to that other Australian government agency of the service of making a supply of goods and/or services to an individual. The same reasoning as stated previously in respect of subsection 38-30(3) and (4) applies with the exception that the underlying supply you make to the individual can be a supply of ‘care’ for the purposes of that provision. In this situation, the reference to subsection 38-30(4) is relevant, as you are being contracted by an Australian government agency and its payment to you would constitute funding by the Commonwealth, State or Territory. Where another Australian government agency contracts you to provide goods and/or services to one of their clients, the supply to the Australian government agency is GST-free under subsection 38-60(3) of the GST Act to the extent the services are of a kind covered by: ● Item 2.1 daily living activities assistance and provided by you to an aged or disabled person, or ● the GST-free Supply (Care) Determination 2017 and provided by you to a targeted person unless you have agreed with the other council that the supply is not to be treated as a GST-free supply under subsection 38-60(4). | Detailed Reasoning - Insurers and compulsory third party scheme operators: As explained in question 3, your supply to another entity carrying on the business is not ‘care’ as care can only be supplied to an individual. A business entity cannot be supplied with care. However, subsections 38-60(1), (2) and (4) state: | Detailed Reasoning - Insurers: (1) If: (a) a supply is a supply of a service to an insurer; and (b) the service is the supplier making one or more other supplies of goods or services to an individual; and (c) at least one of the other supplies is: (i) wholly or partly *GST-free under this Subdivision; and (ii) for settling one or more claims under an *insurance policy of which the insurer is an insurer; the first-mentioned supply is GST-free to the extent that the other supplies mentioned in paragraph (b) are GST-free under this Subdivision. | Detailed Reasoning - Compulsory third party scheme operators: (2) If: (a) a supply is a supply of a service to an *operator of a *compulsory third party scheme; and (b) the service is the supplier making one or more other supplies of goods or services to an individual; and (c) at least one of the other supplies is: (i) wholly or partly *GST-free under this Subdivision; and (ii) made under the compulsory third party scheme; the first-mentioned supply is GST-free to the extent that the other supplies mentioned in paragraph (b) are GST-free under this Subdivision. | Detailed Reasoning - Parties may agree for supply not to be GST-free: (4) However, a supply is not GST-free (to any extent) under this section if the supplier and the *recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies. Where an insurer or compulsory third party scheme operator contracts you to provide goods and/or services to one of their clients, you are making the supply to that insurer or compulsory third party scheme operator of the service of making a supply of goods and/or services to an individual. The same reasoning as stated previously in respect of subsection 38-30(3) and (4) applies with the exception that the underlying supply you make to the individual may be a supply of ‘care’ for the purposes of that provision. Where the insurer or compulsory third party scheme operator is not an Australian government agency, payments by them to you will not be government funding. However, subsection 38-30(3) is relevant as this does not require government funding. The supply under your arrangement with the insurer or compulsory third party scheme operator is GST-free under subsection 38-60(1) or (2) respectively of the GST Act to the extent the services are of a kind covered by: ● Item 2.1 daily living activities assistance and provided by you to an aged or disabled person unless you have agreed with the insurer or compulsory third party scheme operator that the supply is not to be treated as a GST-free supply under subsection 38-60(4).