Skip to content

Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

About FaHCSIA

Circular 2: Recipients of Funding from FaCSIA


Section 1 - Who should read this Circular?

You should read this circular if you are an enterprise (such as an incorporated company, association, sole trader or other entity that provides goods and services) that receives funding from the Commonwealth Department of Family and Community Services (FaCSIA) to provide services to people in the community.

This includes (but is not limited to) grants/ payments for disability services, children's services, family relationship services and emergency relief services.

It does not include purchases made by FaCSIA for its own internal use, such as stationery or computers.

This circular provides important information about how the Goods and Services Tax (GST) may affect the grant/payment that you receive. It will assist you in taking action that is essential if you wish to receive grants/payments from FaCSIA.

TO RECEIVE FUNDING FROM FaCSIA AFTER 1 JULY 2000 YOU MUST:

  1. Register for your Australian Business Number by applying to the Australian Taxation Office (see section 2 of this circular)

  2. If you are an income tax exempt charity, apply to have this status endorsed by the Australian Taxation Office (see section 3 of this circular)

  3. If you are legally required to do so, you must register for the GST. Even if you are not required to do so, you may choose to register (see section 4 of this circular)

  4. If asked, agree, to allow FaCSIA to produce Recipient Created Tax Invoices (see section 5 of this circular)

  5. Obtain any advice or information you need about The New Tax System to enable you to make informed decisions and comply with legal requirements (see section 6 of this circular)


[ top ]


Section 2 - Register for an Australian Business Number

An Australian Business Number, or ABN, is a single unique identifying number which will ultimately be used for dealings with government departments and agencies by anyone carrying on an enterprise such as providing goods or services for money in Australia.

The ABN is not the same as registration for GST. Even if you do not intend to register for GST, or if the services you provide are exempt from the GST, you should register for an ABN.

FaCSIA will not provide you with funding after 1 July 2000 unless you have provided us with your ABN.

We will do this because the law requires us to withhold 48.5 per cent Pay As You Go tax and send this to the Australian Taxation Office for any payment after 1 July to an enterprise without an ABN. You would not have access to this money until a tax assessment is made. We do not want to do this because it might reduce your ability to provide services to the community. The solution is for you to register for an ABN.

Have you registered for an Australian Business Number?

If you have not already done this, register now. It is a simple process. To register for an ABN:
[ top ]

Section 3 – Income tax exemption and charity status

Depending on your grant/payment arrangements, staff from FaCSIA may ask you if you have been endorsed as an income tax exempt charity. You need to be ready to provide this information.

[ top ]

Section 4 - Register for GST

This section has four (4) parts.

You must register for the GST if you are carrying on an enterprise such as providing goods or services for money and have an annual turnover of $50,000 or more ($100,000 or more in the case of charities). Turnover includes any grants/payments from government.

If your turnover is less than these limits you do not have to register for GST, but may choose to do so. You should consider the nature of your activities and seek tax advice. There is considerable information available to assist you in making your decision (see Section 6 of this circular).

Staff from FaCSIA will be asking you about your GST registration. You need to be ready to provide this information and must tell us if you change your registration status.

PART A - If you are required (or choose) to register for GST

If you register for GST then you will have to send the Australian Taxation Office one-eleventh of the payments you get that are associated with any supply (providing goods or services for money or other benefits) or obligation to supply that is subject to the GST.

Your grant/payment from FaCSIA will be subject to the GST and you will have to pay one-eleventh to the Australian Taxation Office. Your grant/payment will be increased to help cover this cost.

The payment that you receive from your customers or clients in return for supply of some goods or services may be exempt from GST (for example disability services and childcare) – you should seek tax advice to see if your services are exempt.

Finally, you can claim back (as an input tax credit) 10 per cent of the price of anything you purchase to help you provide your services, where the price includes GST.

PART B - If you choose not to register for GST

If you choose not to register for the GST then you will not need to pay GST to the Australian Taxation Office on your FaCSIA grant/payment or on any payments from customers or clients. Because you will not be paying the GST, your FaCSIA grant/payment will not need to be increased.

On the other hand, you will not be able to claim any input tax credit for the GST that you pay on your purchases.

If you are not registered for GST and if your payment from FaCSIA comes after you have provided a service and raised an invoice for that service, then your invoice does not have to specify the words 'tax invoice' (see Section 5A). However, you should include your ABN on any invoice to assist us with administrative procedures.

PART C - Which is the right decision for you?

FaCSIA cannot assist you in making this decision. You should seek tax advice (see Section 6).

PART D - Special structures for GST

You need to read this part only if you have adopted a special structure for GST purposes.

The tax legislation allows you to structure your organisation into separate parts, some of which you might register for GST and some of which you might not register. Examples are branches or sub-entities. You are likely to have obtained tax advice in making this decision and will understand the benefits and requirements.

When FaCSIA staff ask for information on the GST registration status of your enterprise, in respect of specific services you supply and grants/ payments that we make for that service, we need to know whether or not you have registered the specific part of your organisation (eg. branch or sub-entity) that makes the supply and receives the grant/payment.

If you do not understand what is required, then please discuss this with your tax adviser.

[ top ]

Section 5 - Tax invoices

You need to read this section only if you have registered, are going to register, or are required to for GST.

This section has two (2) parts.

If you register for GST you will be issuing and receiving tax invoices. Tax invoices are evidence of the amount of GST that has been paid so that purchasers can claim input tax credits from the Australian Taxation Office. If you are not sure how Tax Invoices will apply to your enterprise you should seek tax advice.

PART A – Payments made on invoice

If your payment from FaCSIA comes after you have provided a service and have raised an invoice for that service, then you need to ensure that your invoice meets the requirements for a Tax Invoice.

That is, it must have:

  1. A description and quantity of goods or services supplied

  2. The price of goods or services supplied

  3. The GST component of that price

  4. Your organisation's name and ABN

  5. FaCSIA' name and ABN

  6. The words 'tax invoice'


PART B – Payments made automatically

FaCSIA will create and fax to you the Recipient Created Tax Invoice we generate on your behalf when we make each payment of your grant/payment. If you do not have a fax number, then you should provide the number of a suitable fax – possibly that of your Treasurer or accountant. We will not mail Recipient Created Tax Invoices.

[ top ]

Section 6 - Advice and further information

There is considerable government assistance directed to help enterprises understand the GST. Some of the sources of this information are listed in this section.

Australian Taxation Office

There are several Australian Taxation Office booklets that are relevant to the enterprises that receive grants/payments from FaCSIA. These include 'Charitable, Religious and Non-profit Organisations and The New Tax System' (recently revised), 'Accommodation and The New Tax System', 'Child and Aged Care and The New Tax System', 'The Health Industry and The New Tax System' and 'Guide to the GST' (revised).

Contact the Australian Taxation Office for a copy of these and other documents by:
The Australian Taxation Office website has other general information about the GST, and questions and answers for particular industries.

When you are ready to apply for an ABN, use the Business Entry Point website to lodge your application form electronically. On the Australian Taxation Office website you can download forms that will allow you to amend your ABN registration or to open new business accounts with the ATO. Completed forms should be mailed to the ATO.

FaCSIA Tax Manager

If you have any questions, or would like a copy of this circular, please telephone the FaCSIA Tax Manager on (02) 6244 1414.

We cannot help you with general tax questions and cannot provide tax advice. But we can explain what this circular means and what you will need to do to ensure that you continue to receive funding from FaCSIA after 1 July 2000.

People considering issues relating to the application of the GST should not solely rely on the information in this Circular. Further, comprehensive advice relevant to your particular circumstances should be obtained either from the Australian Taxation Office or from an appropriate professional advisor.

Revised: September 2004
FaCSIA Tax Manager, Financial Services Branch
Australian Government Department of Family and Community Services
Phone: (02) 6244 1414