Whether government funded home care is GST-free depends on the type of funding.
If you do not receive funding directly from government to provide your home-care services, see Non-government funded home care.
Supplying care when you receive government funding under certain Acts
Your supply of home care is GST-free if you supply it to a care recipient and you receive a home care subsidy or government funding for the care under any of the following:
- Aged Care Act 1997
- Aged Care (Transitional Provisions) Act 1997
- Home and Community Care Act 1985.
See also:
- Subsections 38-30(1) and (2) of the GST Act
The fees that you charge to the care recipient for this care, such as a basic daily fee and an income-tested care fee for home care under the Aged Care Act, are payment for a GST-free supply.
If you supply GST-free government funded home care to the care recipient and supply additional services to them, you need to consider Additional services for care recipients.
If you supply services to another business that receives a home care subsidy or government funding, this is generally not GST-free, see Subcontracted services.
Consumer directed care under the Aged Care Act
Consumer directed care gives care recipients more choice and flexibility about the types of care and services they access, how the care is delivered and who delivers it to them.
Under consumer directed care, home care subsidies are payable to approved providers under the Aged Care Act. These approved providers are required to provide all of the care services to the care recipient either directly or through subcontract arrangements. Approved providers do not contract other suppliers as agent for care recipients.
If an approved provider engages a subcontractor to perform home care services for them, this is a supply by the subcontractor to the approved provider and is generally not GST-free, see Subcontracted services.
Administration fees, care planning fees and exit fees
Administration fees (other than exit fees) for care services and care planning fees are payment for a GST-free supply if the following applies:
- They are payment for arranging the GST-free home care services to be delivered.
- You receive a home care subsidy under the Aged Care Act 1997 or the Aged Care (Transitional Provisions) Act 1997 or government funding under the Home and Community Care Act 1985 for supplying the care.
If the administration fees for care services and care planning fees relate to both GST-free and taxable services for the care recipient, the fee will need to be apportioned with GST being payable on the taxable component. In some cases, a taxable component may be merely incidental to a GST-free component and you will not need to account for GST on the taxable component, see Supplies with taxable and GST-free components.
Exit fees are not payment for a GST-free supply as they are:
- considered to be payment for the activities associated with leaving the approved provider and/or for transferring unspent funds to another provider
- not considered to be payment for care or part of the service of arranging for care.
Supplying care when you receive other government funding
Care services are GST-free if all of the following apply:
- You receive funding from the Commonwealth (including under the Commonwealth Home Support Program), a State or a Territory, or a local government in connection with the supply
- The supply is made to either a
- targeted person
- carer of a targeted person
- It is a supply is of either a
See also:
- Subsection 38-30(4) of the GST Act
- GST-free Supply (Care) Determination 2017External Link
If you supply services to another business that receives government funding, this is generally not GST-free, see Subcontracted services.
Targeted person
A targeted person means a person (whether a frail, older person or a younger person) who:
- has a moderate, severe or profound disability (including addiction to a drug)
- lives at home, and
- would, otherwise, be at risk of prematurely or inappropriately needing long term care in a hospital or other institution.
Listed services for a targeted person
Listed services for a targeted person are:
- home help
- personal care
- home maintenance
- home modification
- provision of food
- provision and delivery of meals at home or at a day care or similar centre
- respite care
- transport to and from day care or similar centres and for shopping trips, social outings and for health-related purposes
- community paramedical services
- community nursing
- assessment of the person’s care needs
- referral to other community care services
- training in the use of aids and appliances and in how to get the most out of the other services mentioned in this list
- individual care planning or case management
- provision of basic equipment for social support
- day care
- linen services
- counselling
- community advocacy for a purpose mentioned in section 81-1 of the Aged Care Act 1997
- medication management
- provision and monitoring of personal alert systems
- provision of therapeutic supplies and services for target people under the program known as the Psychogeriatric Unit Program administered by the Commonwealth
- continence management.
Example – Supply of government funded care to a targeted person
Home Assist Pty Ltd receives funding from the State to supply care services to a range of care recipients. Bill applies to Home Assist for funded care. Bill lives at home and has a disability, being a frail, older person. Without care services, Bill would require residential care.
One service involves Home Assist doing the shopping for Bill. Home Assist charges a fee of $10, with Bill paying for the groceries.
The supply of the shopping service by Home Assist to Bill for $10 is GST-free as:
- Bill is a targeted person
- Home Assist Pty Ltd receives government funding in connection with the care
- the service is of a kind listed (home help).
If you supply GST-free government funded home care to a targeted person and supply additional services to them, you need to consider Additional services for care recipients.
Listed services for a carer of a targeted person
Listed services for a carer of a targeted person, if they are supplied to enable the carer to give care to a targeted person, are:
- home help
- personal care
- home maintenance
- home modification
- provision of food
- provision and delivery of meals at home or at a day care or similar centre
- respite care
- transport to and from day care or similar centres and for shopping trips, social outings and health-related purposes
- training in the provision of services mentioned in the list of services for targeted persons
- provision of basic equipment for social support
- linen services
- counselling
- carer support
- community advocacy for a purpose mentioned in section 81-1 of the Aged Care Act 1997
- provision and monitoring of personal alert systems
- assessment of the carer’s care needs
- referral to other community care services
If you supply GST-free government funded home care to a carer of a targeted person and supply additional services to them, you need to consider Additional services for care recipients.
Services that are not listed services
Services that are not listed services for targeted persons and carers include:
- rehabilitation and health care services (other than community paramedical services, community nursing and counselling) – however they may be GST-free health supplies under a different section of the GST Act
- social support at home, such as visiting and companionship
- accommodation and assistance with housing, and
- aids or appliances (other than basic equipment for social support and personal alert systems); however, they may be GST-free health supplies under a different section of the GST Act.
Administration fees and care planning fees
If you charge administration fees for care services and care planning fees which relate to both GST-free and taxable services to the care recipient, the fee will need to be apportioned with GST being payable on the taxable component. In some cases, a taxable component may be merely incidental to a GST-free component and you will not need to account for GST on the taxable component, see Supplies with taxable and GST-free components.
Additional services for care recipients
A care recipient may be required to pay for an additional home care service or a user pays service.
The additional home care service or user pays service that you supply to the care recipient will only be GST-free government funded home care if it meets the requirements of:
- Additional services when a home care subsidy is received
- Additional services when other government funding is received
If you do not receive government funding in connection with the additional home care services, see Non-government funded home care.
Additional services when a home care subsidy is received
To receive a home care subsidy for a care recipient, you and the care recipient must enter into a written home care agreement which includes a care plan and an individualised budget. The home care subsidy forms part of the individualised budget for the services under the care plan.
Where additional services are required, the parties can agree to update the care plan and the individualised budget. These additional services will be GST-free when they form part of the care plan.
Where the additional services do not form part of the care plan in the home care agreement, these additional services will only be GST-free home care if they satisfy the requirements of:
Additional services when other government funding is received
Some government funding is for only certain services or a certain quantity of services.
If the government funding agreement states the quantity of services that the funding relates to, the supply of additional services to a care recipient will be GST-free government funded home care if:
- that quantity of services in the government funding agreement is not exceeded
- the care recipient is a targeted person or a carer of a targeted person, and
- the home care service is a listed service for a targeted person or a listed service for a carer of a targeted person.
If the government funding agreement does not state the quantity of services that the funding relates to, the supply of additional services to a care recipient will be GST-free government funded home care if:
- the care recipient is a targeted person or a carer of a targeted person, and
- the home care service is a listed service for a targeted person or a listed service for a carer of a targeted person.
Example – additional services for a care recipient
Care Support Pty Ltd receives government funding of $150 per week to provide home help services to Sarah who satisfies the requirements for being a targeted person. The funding is in relation to home help generally and the funding requirements do not state the number of hours this funding relates to.
Home help is a listed service for a targeted person. Normally, Sarah receives 5 hours per week of home help. The supply of the 5 hours per week of home help is GST-free.
In one week, Sarah requires an additional two hours of home help and pays $60 to Care Support for this additional two hours.
As the government funding relates to home help generally and does not relate to only a certain quantity of home help, the additional two hours of home help is GST-free.
End of exampleIf the government funding only relates to certain home-care services or only relates to a certain quantity of home-care services, any additional services will not be GST-free government-funded home care but may be GST-free Non-government funded home care.