To GST Or Not To GST? – NDIS Plan Management
It’s tax time, the time of year when our team at Canny Group roll up our sleeves even further to assist our clients. But what does tax time, or tax at any time have to do with NDIS Plan Management?
For the National Disability Insurance Agency (NDIA) participants, the funding allocated to them for their individual and personal NDIS plan is not income, therefore it is tax-exempt. Their funding is based on the supports and services they need for their functional impairment and capacity, and to assist with working towards and achieving their goals. The funding is not means-tested against the participant nor does it impact the income of any pension the participant may be on and receiving. As National Disability Insurance Scheme (NDIS) funding is not income, participants can’t claim expense deductions or claim for assets provided through their NDIS funding.
Whilst NDIS Plan Management for National Disability Insurance Scheme participants is not subject to the rigours of tax returns, “tax time” as we know it does however, impact NDIS providers.
The providers of supports and services delivered to NDIS participants are many and varied – but they all have one thing in common: charging for their services and wanting to be paid. As NDIS Plan Managers, Canny Plan Management promptly process and pay invoices that meet the Tax Invoice Requirements of the Australian Tax Office (ATO) and NDIS to ensure timely and accurate funding expenditure and balances for our clients and support cashflow for providers.
Check out what our Canny Plan Management participants have to say for themselves here about their experience with our prompt processing and payment of invoices!
NDIS Funds + The Rules
The utilisation of a participant’s funding is subject to their plan and the pricing determined to apply to NDIS supports. This is governed by the rules set out in the NDIS Price Guide which outlines the price limits for supports delivered to NDIS participants to ensure value for money and who doesn’t like value for money? A bonus for participants with NDIS Plan Management in their plans is that they can negotiate lower prices. Even better value for money – it’s a win-win!
Support Workers Take Note… Many, but not all NDIS supports are GST-free
Just when everyone thought they had a handle on the Goods and Services Tax (GST) introduced in Australia in 2000 through the A new tax system (Goods and Services Tax) Act 1999, thirteen years later, along came the National Disability Insurance Scheme. With the introduction of the NDIS, the Goods and Services Tax Act was amended to include reference to the NDIS and its participants. Section 38-38 of the GST Act makes provisions for Disability support provided to NDIS participants, and the criteria required to be met for a supply of a service or support to be GST-free. Whilst not quite as dramatic as Hamlet’s soliloquy, the question of whether GST applied or not has NDIS providers and participants alike pondering the question.
In accordance with s38-38, a disability support provided to NDIS participants must meet four requirements to be eligible to be GST free:
A supply is GST-free if the supply:
(a) is a supply to a participant (within the meaning of the National Disability Insurance Scheme Act 2013) for whom a participant’s plan is in effect under section 37 of that Act.
The participant who is receiving the support must have an active National Disability Insurance Agency (NDIA) approved NDIS Plan at the time the supports are delivered. An NDIS Plan becomes inactive when it is replaced by a new plan or when the participant ceases being a participant of the NDIS.
(b) is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of that Act, in the participant’s plan.
The supports are to be reasonable and necessary for a participant’s disability and within contact of the goals and supports specified in the participant’s plan.
(c) is made under a written agreement, between the supplier and the participant or another person that (i) identifies the participant; (ii) states that the supply is a supply of one or more reasonable and necessary supports in the statement included, under subsection 33(2) of the Act, in the participant’s plan.
There must be a written agreement between the provider and the NDIS participant or another person acting on behalf of the participant such as their plan nominee, support coordinator or representative. The NDIA recommend participants have written Service Agreements with providers, however with the exception of Specialist Disability Accommodation, a formal written Service Agreement is not mandatory. To satisfy the requirements of the GST Act, the written agreement can be in the form of a formal service agreement as recommended, but can also be in the form of written correspondence between the parties, receipts or invoices issued. It needs to identify the participant as the recipient of the service or support being provided, ensuring it aligns as a reasonable and necessary support in contact with participant’s NDIS effective plan for which it is being provided.
(d) is of a kind that the Disability Services Minister has determined in writing.
Minister’s Determination for NDIS Participants
The Minister’s Determination, like the NDIS Act and GST Act, is a legislative instrument. It identifies the types of services and supports for NDIS participants which are GST-free. These include:
- Specialist Disability Accommodation and accommodation/tenancy assistance
- Assistance in coordinating or managing life stages, transitions and supports, including daily tasks in a group or shared living arrangements
- Household tasks
- Assistance with and training in travel/transport arrangement, excluding taxi fares
- Interpreting and translation
- Assistance to access and maintain education and employment
- Assistive equipment for recreation
- Early intervention supports for early childhood
- Management of funding for supports in a participant’s plan
- Assistance with daily personal activities
- Specialised assessment and development of daily living and life skills, including community participation
- Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training
- Behavioural support and therapeutic supports
- Home modifications
The Minister’s Determination also identifies exclusions to GST-free supports, such as taxi fares. If GST is applicable to a reasonable and necessary support identified in a participant’s plan, the price limits in the NDIS Price Guide are inclusive of GST.
Like previous Ministers’ Determinations, the current Determination which came into effect 1 July 2021 has a sense clause and will be released 30 June 2025.
Please note that this blog does not constitute as advice. The Australia Tax Office (ATO) provides guidance on the GST treatment for the provision of supports to NDIS participants and detailed information can be found in the Explanatory Statement accompanying the Minister’s Determination.
Any provider requiring assistance with tax law compliance and if they are unsure whether or not to GST or not GST should seek financial advice. Get in touch with us today and let our Accounting and Legal team help you get the advice and clarification that you may need.