Private ruling: GST and home care
Date of advice: 4 November 2016
Published: March 2017

Ruling: Q1: Is the supply of home care services by you to consumers GST-free where you receive a home care subsidy under Part 3.2 of the Aged Care Act 1997 or Part 3.2 of the Aged Care (Transitional Provisions) Act 1997 for the care? | A1: Yes, the supply of the home care service will be GST-free under subsection 38-30(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Relevant facts and circumstances: You are registered for GST. You are an incorporated non-profit association. You provide home care services to aged persons. You are a registered home care provider pursuant to the Home Care Act 1997 for the purposes of the relevant government Home Care Packages Programme (HCPP). You are paid a government subsidy under the HCPP for a Home Care Package. You enter into a Home Care Agreement with the consumer. You sometimes receive a private payment (top up payment) from a consumer for additional services on top of what is provided for under their Home Care Agreement. This private ruling is limited to supplies made under a Home Care Package.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-30.

Reasons for decision: Summary: In this reasoning: ● unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) ● all terms marked by an asterisk are defined terms in the GST Act ● all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on ato.gov.au Subsection 38-30(1) states: (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. 'Home care' has the meaning given by section 45-3 of the Aged Care Act 1997 which provides: Home care is care consisting of a package of personal care services and other personal assistance provided to a person who is not being provided with residential care. We will consider various scenarios below for supplies made pursuant to a Home Care Agreement. | Detailed Reasoning - Scenario 1 - Fully government subsidised services: You supply home care services as part of a Home Care Package to a consumer pursuant to a Home Care Agreement between you and the consumer. The consumer makes no co-payment (basic fee or income tested fee) or private payment (top up payment) to you for the care. Where you receive a home care subsidy under Part 3.2 of the Aged Care Act 1997 or Part 3.2 of the Aged Care (Transitional Provisions) Act 1997 for a Home Care Package (package of personal care services and other personal assistance) under which you make supplies to a consumer pursuant to a Home Care Agreement, the supply is GST-free under subsection 38-30(1). [Note: There is no GST payable on the subsidy you receive under Part 3.2 of the Aged Care Act 1997 or Part 3.2 of the Aged Care (Transitional Provisions) Act 1997 .] | Detailed Reasoning - Scenario 2 - Partly government subsidised services: You supply home care services as part of a Home Care Package to a consumer pursuant to a Home Care Agreement between you and the consumer. The consumer is required to make a co-payment (basic fee or income tested fee) to you in relation to those services. ATO Interpretative Decision ATO ID 2003/13 Goods and Services Tax GST and supply of community care for a fee provides that an entity makes a GST-free supply under subsection 38-30(1) when it supplies care services, in respect of which the entity receives a community care subsidy, to an aged person in their own home and charges the aged person a fee for those services. If pursuant to the Home Care Agreement with a consumer, you receive a co-payment from the consumer in relation to government funded services supplied under a Home Care Package, that payment will form part of the consideration for the GST-free home care services supplied under subsection 38-30(1). This would also be the case where pursuant to the Home Care Agreement with a consumer, you receive a private payment from the consumer in relation to a pooled package of government funded services supplied under a Home Care Package. Subsection 38-30(1) only requires that the supplier receives a home care subsidy under Part 3.2 of the Aged Care Act 1997 or Part 3.2 of the Aged Care (Transitional Provisions) Act 1997 in relation to the supply. Therefore, where the supply is GST-free, any co-payment or private payment made by the consumer for that supply will also be for the GST-free supply. | Detailed Reasoning - Scenario 3 - No home care subsidy or other government subsidy in connection with the care: Pursuant to the Home Care Agreement with a consumer, you receive a private payment from the consumer in relation to home care services but no home care subsidy is received. The supply will be GST-free if the supply of home care services is provided to one or more aged or disabled people and the services 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: | Detailed Reasoning - Column 2 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. Alternatively, the supply may be GST-free under subsection 38-10(1) which states: A supply is GST-free if: (a) it is a service of a kind specified in the table in this subsection, or of a kind specified in the regulations; and (b) the supplier is a *recognised professional in relation to the supply of services of that kind; and (c) the supply would generally be accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the * recipient of the supply. | Detailed Reasoning - Service: 1 Aboriginal or Torres Strait Islander health 2 Acupuncture 3 Audiology, audiometry 4 Chiropody 5 Chiropractic 6 Dental 7 Dietary 8 Herbal medicine (including traditional Chinese herbal medicine) 9 Naturopathy 10 Nursing 11 Occupational therapy 12 Optometry 13 Osteopathy 14 Paramedical 15 Pharmacy 16 Psychology 17 Physiotherapy 18 Podiatry 19 Speech pathology 20 Speech therapy 21 Social work | Detailed Reasoning - Scenario 4 - You contract another Care Provider to deliver services to your client: You have the contractual obligation (pursuant to the Home Care Agreement with a consumer) to supply home care services to a consumer and Entity B (other health care provider) will supply a service to you of providing the stipulated services to your client. In this situation, Entity B (other health care provider) makes a supply to you of 'contracted services'. Generally, this supply will be subject to GST under section 9-5 where the other health care provider (Entity B) is carrying on an enterprise and is registered or required to be registered for GST. You are entitled to claim input tax credits in relation to the services that you acquire from the other health care provider (Entity B) where the requirements of section 11-5 are met. As you have the contractual obligation to supply the home care services to the consumer, the supply made by you to the consumer will be GST-free under subsection 38-30(1).