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

About FaHCSIA

FaCSIA Sheet 5: Disability Specific GST Information

(Supplement to FaCSIA Circular 2 'Recipients of Funding from FaCSIA')

This FaCSIA Sheet is designed to inform service providers of the GST treatment of various payments made under the Commonwealth Disability Services Program.

Introduction

This FaCSIA Sheet should be read in conjunction with FaCSIA Circulars 1 and 2, which contain general FaCSIA policies on tax reform. In particular, these Circulars advise that service providers must have an Australian Business Number (ABN) to do business with FaCSIA. They also contain general information and explanations about registration for GST, Income Tax Exempt Charity (ITEC) status, tax invoices, recipient created tax invoice arrangements for grants and sources of additional advice. Copies of the circulars can be obtained by contacting your FaCSIA state or territory office or on the FaCSIA Tax Reform website.

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Commonwealth Funded Disability Services Program

FaCSIA makes a broad range of disability payments.

Disability payments are in respect of:
All of these payments are consideration for a taxable supply and subject to GST if the grantee is registered for GST.

This means that all GST registered providers receiving payments from FaCSIA must remit one eleventh of each payment to the Australian Taxation Office (ATO).

This FaCSIA Sheet is focussed on the transactions between FaCSIA and service providers. It is not providing advice on third party transactions between service providers and other organisations or clients. For further information on the tax treatment of third party transactions please contact the ATO on 13 24 78 or ACROD on (02) 6282 4333. For further information on GST free services for people with disabilities see the ATO publication 'Child and Aged Care and The New Tax System' available on the Australian Taxation Office website.

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Grants

Most payments provided by FaCSIA are grant payments. These include payment for employment assistance, advocacy, print disability, information services, carer respite services, wage subsidies and consumer training and support.

All grant payments are consideration for a taxable supply if the service provider is registered for GST. That is, the service provider will need to remit one eleventh of each payment to the ATO. FaCSIA will 'gross up' these grants by 10%.

The amount and timing of grant payments is generally fixed in advance and set out in a payment schedule attached to a funding agreement. Given the nature of these payments, FaCSIA funding agreements authorise FaCSIA to generate invoices on behalf of the service provider. These are called recipient created tax invoices or RCTI's. (In this case, FaCSIA is the 'recipient' of the 'supply of services' from the organisation or outlet.)

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Invoice Driven or Fee for Service Payments

Invoice driven or fee for service payments made by FaCSIA will not be managed in the same way as grant payments. Although they may be made under a contract, the payments are made following the receipt of an invoice from the service provider. The invoice determines the amount and timing of the payment. These types of payments include: supported wage system, workplace modifications, supported employment placement officers and disability recruitment coordinators. These payments will also be subject to GST if the service provider is registered.

These payments will continue to be made upon receipt of an invoice. However, if a service provider is registered for GST, this invoice should now be a correct tax invoice which includes GST in the price claimed.

A tax invoice should include:
Refer to Section 29-70 of the A New Tax System (Goods and Services Tax) Act 1999.

For the purposes of Disability services payments, the FaCSIA ABN which should be shown is 36 342 015 855/002.

If the service provider is not registered, they should submit a standard invoice with a price that does not include GST. For administrative reasons, FaCSIA is asking that this invoice display the organisation's ABN so that we can be sure there is no obligation on us to withhold part of this payment under the A New Tax System (Pay As You Go) Act 1999.

See Circular 2: Recipients of Funding from FaCSIA for more information about tax invoices and the PAYG withholding tax requirements.

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

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Further Information

If you have any questions about this FaCSIA Sheet, 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 FaCSIA Sheet means and what you will need to do to ensure that you continue to receive funding from FaCSIA after 30 June 2000.