Australia

Details

  • Service: Tax, Indirect Tax
  • Industry: Healthcare
  • Type: Regulatory update
  • Date: 31/07/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Nick Kallinikios

Nick Kallinikios
Partner, Indirect Tax

+61 3 9288 6714

nkallinikios@kpmg.com.au

GST and the National Disability Insurance Scheme 

by Nick Kallinikios, Indirect Tax Specialist

The introduction of the National Disability Insurance Scheme (NDIS) with effect from 1 July 2013 has important implications for entities providing disability support to participants under the NDIS. What many may not realise is that the goods and services tax (GST) status of some disability supports may have changed.

Various 'health' supplies are currently GST-free. This includes certain specialist disability services, medical services, medical aids and appliances and community residential care. Some of these supplies are only GST free where the supplier receives Government funding for the service under prescribed legislation like the Disability Services Act, or complementary State or Territory law. A feature of NDIS is that funding is instead provided directly to participants to purchase disability support from the supplier.

 

Consequential amendments to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) will ensure affected services, support and medical aides acquired by NDIS participants continue to be GST-free, via new section 38-38. However, several conditions need to be met in order to attract the application of sections 38-38, specifically the supply must be:

  • to a participant for whom a 'NDIS plan' is in effect
  • specified as 'reasonable and necessary support' in that plan
  • made under a written agreement that identifies the participant and states the supply is specified in the plan
  • of a kind determined in a legislative instrument.

 

It follows that suppliers will need to: 

  • sight the NDIS plan
  • verify the supports are approved
  • have a written agreement with the participant or another person, such as Disability Care Australia
  • confirm the supply is of a kind specified in a legislative instrument made by the Disability Services Minister.

 

Getting the GST treatment and documentation right helps ensure the best outcome for both suppliers and NDIS participants.

 

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