Private ruling: GST and home care
Date of advice: 8 May 2017
Published: September 2017

Ruling: Q1: Where you supply home care services of a kind covered by Item 2.1 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? | A1: 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. | Q2: Where you supply nursing services to a consumer, are the services GST-free? | A2: Yes, where the services are supplied by a recognised professional and the services would be generally accepted in the nursing professional as being appropriate treatment for the recipient of the supply, the nursing services are GST-free under section 38-10 of the GST Act. | Q3: Where you are engaged by Entity B, (the Retirement Village), to deliver home care services of a kind covered by Item 2.1 daily living activities assistance to their clients, will your supply to the Retirement Village be a GST-free supply? | A3: No, the supply by you to the Retirement Village is not a supply of home care services that is GST-free under subsection 38-30(3) 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.

Relevant facts and circumstances: You are registered for GST. You provide personal care and support services, home care and nursing services to aged or disabled people in their own homes. You do not receive any government funding in relation to the services. You do not provide any brokered services. You do not provide residential care. You are engaged directly by the aged or disabled people. You also have an agreement with Entity B (the Retirement Village) to deliver three hours care to their clients staying at their non-resident respite accommodation. Where you are engaged directly by the aged or disabled people you enter into a written agreement with them. You have two separate agreements, the standard services agreement and the registered nurse services agreement.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-10, and | 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 | Detailed Reasoning - Questions 1 and 2: You enter into a standard service agreement with a consumer to provide them with agreed services excluding any care, services or tasks required to be undertaken by a registered nurse. Where you agree to provide nursing services you enter into a registered nurse service agreement. | Detailed Reasoning - Home care services - Non-government subsidised/funded: 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. '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. 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 Charities consultative committee resolved issues document (search for 'QC 27139' on the ATO website) lists the following services that are not covered by Item 2.1: ● assistance with housework ● assistance with gardening ● meal preparation services ● grocery shopping for individuals ● monitoring medication ● rehabilitation services ● assistance with writing cheques, letters, etc ● advocacy services ● provision of social and community activities, such as providing companionship, craft and reading activities to individuals, and ● driving individuals to and from appointments. Where your home care services are of a kind covered by Item 2.1 daily living activities assistance and are supplied 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. | Detailed Reasoning - Nursing services: A supply of nursing services may be GST-free under subsection 38-10(1) which provides: 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 A recognised professional is a person who is registered, permitted or approved under state or territory law to provide the listed health service. It is our understanding that your supply of nursing services is provided by a Registered Nurse satisfying the definition of a recognised professional in the GST Act. Where you supply a nursing service performed by a Registered Nurse (a recognised professional) and that supply would generally be accepted in the nursing profession as being appropriate treatment for the consumer the supply will be GST-free. | Detailed Reasoning - Apportionment: Where you provide 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. One such method available is outlined in paragraph 104 and 105 of GSTR 2011/8: Relative time to perform the supply 104. Where you supply services and charge them out on a time basis (for example, at an hourly rate), it may be reasonable to apportion the consideration for a mixed supply based on the time taken to perform the relevant taxable and non-taxable parts of the supply. This method may be suitable where you make mixed supplies of professional or trade services. Example 16 - GST-free and taxable services 105. Under direction from a doctor, Gilda provides home care to a privately funded client in the client's own home…. She charges a flat hourly rate for her services that include helping to feed and dress her client. These services are GST-free under section 38-30. Gilda also tidies her client's house and garden. These latter services are taxable. Gilda apportions the consideration for her services on the number of hours it takes for her to perform the services. This is a reasonable method of apportionment to ascertain the value of the taxable part of the supply. | Detailed Reasoning - Question 3: Subsection 38-30(3) states: 38-30(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. To satisfy the elements of this provision, there must be a supply of 'home care' comprising certain services that are 'provided' to one or more aged/disabled people. You supply the service to the Retirement Village of providing the stipulated services to the client of Retirement Village. '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. From these definitions, a supply of '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, 'home care' is not supplied to an entity carrying on a business (Retirement Village) where the supply is a service of providing the home care services to an individual client of that entity. In this instance, the Retirement Village carrying on the business is not being supplied 'home care' by you. You will accordingly make a taxable supply of contracted services to the Retirement Village. 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.