Private ruling: GST and home care packages
Published: June 2014

Ruling: Q1: Are there any goods and services tax (GST) consequences for you in relation to the payment you make to a care or service provider for the care or services they provide to a care recipient where that care recipient has a Home Care Package in place under the Aged Care Act 1997? | A1: No. In this situation you are acting merely as a paying agent for the care recipient (also known as a consumer).

Relevant facts and circumstances: ● You are registered for GST. ● You have been approved by the Department of Health and Aging under the Aged Care Act 1997 as a home care provider allowing you to provide to consumers Consumer Directed Care (CDC) Home Care Packages. ● The document Frequently Asked Questions issued by the Department of Health and Ageing states in relation to the question ‘What is a Home Care Package?’ A Home Care Package is a coordinated package of services tailored to meet the consumer’s specific care needs. The package is coordinated by a home care provider, with funding provided by the Aus tr alian Government. ● The document Home Care Packages Program Guidelines August 2013 also issued by the same Department states the following: ○ Clause 3.2.6 Transparency (Introduction) Under a CDC package, older people have the right to use their budgets to purchase the services they choose … ○ Clause 2.1 Overview (Making use of a Home Care package) …a Home Care Agreement must be offered to the consumer before the package commences… The Home Care Agreement is an agreement between the home care provider and the consumer, which sets out a number of key elements about how the package will be delivered… ○ Clause 3.2.1 Overview (Making use of a Home Care package) The home care provider is the fund holder and will administer the budget on behalf of the consumer in a transparent manner, meeting quality and accountability requirements. ● Your Home Care Agreement provides that you act as an agent on behalf of the consumer in relation to arranging and paying for care or services providers. ● You charge a fee to the consumer for your services.

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

Reasons for decision: Summary: Consumer Directed Home Care as described under the Aged Care Act (1997) was implemented to give a consumer, amongst other things, more control over the type of care and services they receive and by whom. As part of this decision making process, a consumer must first have a plan that has been put into effect under the Aged Care Act 1997 before funding is granted. As a home care provider, you must have a Home Care Agreement (Agreement) in place with the consumer. As part of your responsibilities under this Agreement, you may have to arrange for care or service providers to provide their care and services to the consumer. You may also have to pay the care or service providers for the delivery of their care and services. The public ruling GSTR 2000/37 provides the Australian Tax Office view on agency arrangements. Paragraphs 10 and 11 of this ruling state: 10. An entity may be authorised by another party to do something on that party’s behalf. Generally, the authorised entity is called an agent… 11. For commercial law purposes, an agent is a person who is authorised, either expressly or impliedly, by a principal to act for that principal so as to create or affect legal relations between the principal and third parties. Further to this, paragraph 15 of GSTR 2000/37 provides that when an agent uses his or her authority to act for a principal, then any act done on behalf of that principal is an act of the principal. In this case, the document Home Care Packages Program Guidelines August 2013 issued by the Department of Health and Aging makes it clear that as a home care provider, you are the fund holder and are required to administer the budget on behalf of the consumer. Your Agreement also makes it clear that you are acting as an agent on behalf of the consumer in relation to the arrangement of, and payment for, care and services delivered to the consumer. Given this, there are no GST consequences for you in relation to the payment you make to a care or service provider. In this situation you are acting merely as a paying agent for the consumer.