GST for Other Health Services

GST for other health services is outlined in s38-10 GST Act. It is one of five GST exemptions.

GST for Other Health Services

The confusion starts with the word ‘Allied Health’ itself. There is no universally accepted definition. And hence the GST Act doesn’t give you a universal exemption either, but instead gives you a lot of if’s and when’s. 

Subdiv 38-B

Allied health services are GST-free if they meet one of five possible exemptions in Subdiv 38-B A New Tax System (Goods and Services Tax) Act 1999 – in short GST Act. Think of them as five doors. You only need to fit through one.

1 – Hospital (s38-20)
2 – Aged care (residential care (s38-25), home care (s38-30) or flexible care (s38-35))
3 – Disability (disability support provided to NDIS participants (s38-38) or specialist disability services (s38-40))
4 – Medical services and (s38-7) including Medicare
5 – Other health services (s38-10)

Most relevant for allied health workers are three exemptions: NDIS, Medicare and other health services. Let’s cover NDIS and Medicare in the next article and focus on ‘other health services’.

Other Health Services

Other health services are GST-free under s38-10 GST Act if they meet the following four conditions.

Condition # 1  – In The Table

             s38-10 GST Act: (1)  A supply is GST-free if: (a) it is a service of a kind specified in the table

The Table…..Your service must be listed in the table of s38-10 (1). If it is not, s38-10 is not for you – try a different exemption. Here is The Table –  the 21 ‘other health services’ 

# 1 Aboriginal or Torres Strait Islander Health, # 2 Acupuncture, # 3 Audiology and 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 and # 21  Social work

Condition # 2 –  Recognised Professional

       s38-10 GST Act: (b)  the supplier is a recognised professional in relation to the supply of services of that kind….

Are you a ‘recognised professional’ as defined in the GST Act? The answer is complicated because there is not just one allied health registration. Each allied health profession is different. Some have compulsory registration by law, eg. psychologists. Some have compulsory registration set by their professional body in an attempt to self-regulate the profession, eg. speech pathologists.  And others have voluntary registration either in Australia or overseas, eg. behavioural therapists.

So it all depends on whether you need to be registered – by law or by your professional governing body. If you do and you are, you are a recognised professional as per s195 – 1 GST Act.

s195 – 1 GST Act

This is probably too much detail, so briefly just in case it matters. Here is the actual wording of s195-1.

(a) covers mandatory registration by law:
“a person is a recognised professional,…if: (a)  the service is supplied in a State or Territory in which the person has a permission or approval, or is registered, under a State law or a Territory law prohibiting the supply of services of that kind without such permission, approval or registration” Think of a psychologist. To practice they must register with the Psychology Board of Australia, which is part of AHPRA (Australian Health Practitioner Regulation Agency). So a registered psychologist qualifies as a recognised professional.

And (b) covers mandatory registration as per the profession’s governing body:
“(b)  the service is supplied in a State or Territory in which there is no State law or Territory law requiring such permission, approval or registration, and the person is a member of a professional association that has uniform national registration requirements relating to the supply of services of that kind. Think of a speech pathologist. You must register with Speech Pathology Australia to practice. So a registered speech pathologist would qualify as a recognised professional.

But…if registration is voluntary or overseas, for example for behavioural therapists, then there is no ‘recognised professional’ as per s195-1 GST Act. However, you can still qualify through one of the other exemptions, notable the NDIS exemption.

Condition # 3 – Accepted as Being Necessary

     s38-10 GST Act: (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.

The GST Act doesn’t define the term ‘appropriate treatment’. But there is a legally binding public ruling in which the Commissioner defines the term.

10. …’appropriate treatment’ will be established where the recognised professional assesses the recipient’s state of health and determines a process to pursue, in an attempt to preserve, restore or improve the physical or psychological wellbeing of that recipient insofar as that recognised professional’s particular area of training allows and will include subsequent supplies for the determined process.

Sounds nebulous but if your treatment plan ‘fits the crime’, then you should be fine. This condition rarely is an issue. 

Condition # 4 –  Recipient of Supply

The person receiving the treatment must be the one paying for it. If that is the case – e.g. privately paid treatments – all good. If this is not the case, then you have an issue of supply.

Issue of Supply

There are two common issues of supply. You have an issue of supply if somebody else – not the patient – pays for the treatment. And you have an issue of supply if somebody else – not you – provides the treatment.

1 – Somebody else pays for the treatment

If a third-party – e.g. Medicare, NDIS, private health insurance or workers compensation – pays for the treatment, then they receive your supply. But they are not sick, so they are not receiving an allied health service. So at face value your supply would not be a necesary treatment.

However, there is s38-60. If a health service would have been GST-free under Subdiv 38-B apart from the issue of supply, then s38-60 can fix this for three types of schemes:  Private health insurance s38-60 (1), compulsory third party schemes like workers comp s38-60 (2) and governement agencies like Medicare and NDIS s38-60 (3). But s38-60 only applies to services that would already be GST-free if it wasn’t for the issue of supply.

2 – Somebody else provides the treatment

If you are the one collecting payment but you are not the one actually providing the treatment because you engage contractors, then you also have an issue of supply. So your contractors have to charge you GST, because you are receiving a service from them that is not an allied health service. However, if you are registered for GST, you can claim that GST right back. So it doesn’t really affect you.

If employees provide the service on your behalf, then no issue of supply. 

Summary

So all up, other health services is one of five possible GST exemptions for allied health. You qualify under s38-10 if you are ‘in the table’, a ‘recognised professional’, your treatment fits the norma and you have dealt with the issue of supply. If you tick these four boxes, your supply is GST exempt.

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

GST for NDIS Services

There is usually no GST for NDIS services – if you meet the conditions in s38-38 GST Act. 

GST for NDIS Services

If you are an allied health provider and registered with the NDIS, all your NDIS services should be GST exempt per s38-38 GST – generally speaking. The devil is in the detail. So let’s go through this step-by-step.

GST for NDIS Services

GST is a big topic for NDIS providers. There are five issues to look out for.

1 – Which GST Exemption

The NDIS exemption in s38-38 New Tax System (Goods and Services Tax) Act 1999 – in short GST Act – is an important one for NDIS providers. It makes pretty much all NDIS services GST exempt. But it is not the only exemption you can refer to. As an allied health provider, you have five possible GST exemptions per Subdiv 38-B GST Act.

A – Hospital (s38-20)
B – Aged care (residential care (s38-25), home care (s38-30) or flexible care (s38-35))
C – Disability (disability support provided to NDIS participants (s38-38) or specialist disability services (s38-40))
D – Medical services (s38-7) including Medicare
E – Other health services (s38-10)

Your service might qualify under two or more exemptions. But that makes no difference. The main thing is that you qualify for at least one.

2 – GST Registration

Even if all your services are GST- exempt, you still need to register for GST if your turnover exceeds AUD 75,000 for any given 12-month period. Your turnover includes GST-exempt sales. Below the threshold of AUD 75,000, you can still register voluntarily.

Contrary to what you might think, a GST registration might save you money – a lot. The only time a GST registration will cost you money is if a large part of your services are NOT GST exempt and are made to recipients who are not registered for GST. So even if your turnover is below AUD 75,000, consider registering after you have spoken with your accountant.

3 – Conditions in s38-38 GST Act

Not we get into the nitty-gritty details of your NDIS exemption. Your service to an NDIS participant is GST free, if:

A – Your patient is an NDIS participant as defined in the National Disability Insurance Scheme Act 2013 (‘NDIS Act’).
B – This NDIS participant has an NDIS plan.
C – That NDIS plan is in effect under s37 NDIS Act.
D – That NDIS plan lists your type of services in their Plan Statement (s33 (2) NDIS Act).
E – You have a written service agreement with the participant or their nominee.

F – This agreement identifies the participant.
G – This agreement includes your Supply Statement linking your services to the Plan Statement.

Plan Statement

Your patient’s NDIS plan will include a statement  in which they specify the reasonable and necessary supports funded under the NDIS. This is required under s33 (2) NDIS Act. Your service agreement must link to these reasonable and necessary supports. 

Supply Statement

You link your service agreement to the reasonable and necessary supports listed in the Plan Statement by putting the following Supply Statement into your service agreement. Supply is a word from the GST Act. The GST Act calls your services a supply.

“Our services outlined in this service agreement are a supply of one ore more of the reasonable and necessary supports specified in the statement included, under subsection s33 (2) of the National Disability Insurance Scheme Act 2013, in your plan, with you being the participant of the plan.”

4 – NDIS Plan

When you look at the conditions to qualify for the NDIS exemption, a lot rides on the NDIS plan. But your patients have no legal obligation to show you their NDIS plan. If they don’t, how do you know they even have one? And if they do, that your services are listed in the Plan Statement? And if they are, that your services will still be within the plan’s budget?

You don’t. So here is how this plays out.

A – NDIA Managed

As you know an NDIS participant can manage the plan themselves or engage a plan manager. But instead they can also go for an NDIA managed plan. In that case you as the supplier lodge a service booking before providing the service. Once your service booking is accepted, you know for sure that your service is on plan and on budget. If that is the case, you can stop here. Just invoice without GST.

B – Another GST Exemption

Check whether another exemption could apply. There are five exemptions – see 1 above. If another GST exemption would also apply, then you don’t need to worry about the NDIS exemption. Then it doesn’t matter, whether your patients have an effective NDIS plan or not. Just invoice without GST.

C – Tough Love

If there is no NDIS plan and no other GST exemption in sight, then one option is to go for tough love. Tough love is “No Plan – No Exemption”. If you can’t see an NDIS plan, you just assume that there is none. And charge GST.

D – Sign Here

The alternative to tough love is signing. If your patient assures you that they have an effective plan, you insert the paragraph listed below into the service agreement for your patient to sign. With this signature, you can assume that your service is GST exempt. Here is a draft – adjust or rewrite as you see fit:

“You hereby confirm that you have a current plan (‘your NDIS plan’) approved by the National Disability Insurance Agency (NDIA) and in effect under s37 of the National Disability Insurance Scheme Act 2013 (NDIS Act).

You hereby confirm that the type, time and quantity of services you have requested from us are specified in your NDIS plan as reasonable and necessary support as per s33 (2) NDIS Act, are within the budget for this type of services in your NDIS plan and are of a kind referred to in s38-38 (d) A New Tax System (Goods and Services Tax) Act 1999 (‘GST Act’).

This service agreement between you as participant or nominee of the participant and us as the supplier is legally binding and is the written agreement required in s38-38 (c ) GST Act.

Based on these affirmations we will treat our services to you as exempt from GST per s38-38 GST Act.

You hereby agree that you will inform us of any changes to your circumstances that would affect the above, for example if:

      • You no longer have a NDIS plan in effect
      • Our services exceed the budget in your NDIS plan
      • Our services are no longer listed in your NDIS plan.”

E – Charge GST

And if nothing else works, you charge GST.

5 – What is Covered

As you provide your services, there will be outliers. Things you usually don’t provide or do, but at times you do. Do those outliers fall under the NDIS exemption? A common example are assessment reports.

It all comes back to the NDIS plan outlined above. If your service booking for NDIA managed plans gets accepted, they are covered. If your client gives you in writing that the one-off services or products are listed in the Plan Statement, then they fall under the NDIS exemption. 

So this is a short overview. We hope it helps. Please call or email if you get stuck.

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.