After a couple of years of consultations, the ATO has finalised their position regarding GST and homecare packages.
Except from cancelling some private rulings and now clarifying some grey areas, inconsistently managed by different operations, there is not much change from what is already the main practice:
The invoices of an Approved Provider are generally GST free.
The big exception comprises exit fees. Approved providers are required to remit GST on all exit fee income to the ATO, as these fees to not meet the requirements of care services for their government funded clients.
Subcontracted providers, who have services that attract GST, need to ensure they charge GST where applicable as with current practice, many direct care services, including allied health are GST free. Domestic and personal services are not GST free.
- Any of the following home care services to an aged or disabled person is GST-free for any organisation:
- personal assistance, including individual attention, individual supervision, and physical assistance with
- bathing, showering, personal hygiene and grooming
- maintaining continence or managing incontinence, and using aids and appliances designed to assist continence management
- eating and eating aids, and using eating utensils and eating aids (including actual feeding if necessary)
- dressing, undressing, and using dressing aids
- moving, walking, wheelchair use, and using devices and appliances designed to aid mobility, including the fitting of artificial limbs and other personal mobility aids
- 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.
Examples of Non-government funded home care services that are not GST-free, unless you are the Approved Provider who holds the homecare package:• 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
- driving individuals to and from appointments and social activities
- social and community activities, such as providing companionship, craft and reading activities to individuals.