GST and counselling by a social worker

Is the entity, a social worker, making a GST-free supply under subsection 38-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies counselling to a patient as a component of its supply of social work?

Yes, the entity is making a GST-free supply under subsection 38-10(1) of the GST Act when it supplies counselling to a patient as a standard component or technique of its supply of social work, where the services are generally accepted in the social work profession as being necessary for the appropriate treatment of the patient.

The entity is a social worker. The entity supplies counselling to a patient as a standard component or technique of its supply of social work services.

The patient individually engages and pays the social worker to supply the services.

The entity is a member of the Australian Association of Social Workers (a national association with uniform national registration requirements for the supply of social work services).

The entity is registered for goods and services tax (GST).

Under subsection 38-10(1) of the GST Act, an entity makes a GST-free supply of health services if: • it provides a service of a kind specified in the table in subsection 38-10(1) of the GST Act or of a kind specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) (paragraph 38-10(1)(a) of the GST Act); • the entity is a recognised professional in relation to the supply of services of that kind (paragraph 38-10(1)(b) of the GST Act); and • 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 (paragraph 38-10(1)(c) of the GST Act).

Counselling is not listed in the table in subsection 38-10(1) of the GST Act or in the GST Regulations. Therefore, counselling, in itself, does not satisfy the requirement in paragraph 38-10(1)(a) of the GST Act.

However, the requirement in paragraph 38-10(1)(a) of the GST Act may be satisfied where the supplier is supplying one of the services listed in the table in subsection 38-10(1) of the GST Act and counselling is a standard component or technique of the supply of that listed service.

Psychology' and 'Social Work' are services in the table in subsection 38-10(1) for which counselling may be considered a standard component or technique of the supply.

The entity is supplying social work services and counselling is a standard component or technique of the supply of social work services.

Social work is a service that is listed in the table in subsection 38-10(1) of the GST Act. Accordingly, the requirement in paragraph 38-10(1)(a) of the GST Act is satisfied.

For the purposes of paragraph 38-10(1)(b) of the GST Act, a recognised professional must provide the service.

Section 195-1 of the GST Act provides that a person is a recognised professional in relation to a supply of services of a kind specified in subsection 38-10(1) of the GST Act if: (a) 'the service is supplied in a State or Territory in which the person has permission or approval, or is registered, under a State or Territory law prohibiting the supply of services of that kind without such permission approval or registration; (b) the service is supplied in a State or Territory in which there is no State 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; or (c) ...'.

The entity is supplying social work services. There is no State or Territory law that prohibits a person from supplying social work without permission, approval or registration. Accordingly, in relation to the supply of social work, a person is a recognised professional if that person is a member of a professional association that has uniform national registration requirements relating to the supply of social work services.

The entity is a member of the national association with uniform national registration requirements for the supply of social work services - the Australian Association of Social Workers. Therefore, the entity is a recognised professional in relation to the supply of social work and the requirement in paragraph 38-10(1)(b) of the GST Act is satisfied.

The third requirement in subsection 38-10(1) of the GST Act is that the supply must be generally accepted, in the relevant profession, as being necessary for the appropriate treatment of the recipient of the supply.

As the patient individually engages and pays the social worker to supply the services, the patient is the recipient of the supply.

It is considered that 'appropriate treatment' will be established where an entity assesses that patient'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 patient to the extent that their training allows. 'Appropriate treatment' includes the principles of preventative medicine.

Additionally, the phrase 'generally accepted in the profession' indicates that it is the relevant profession that determines what services are generally accepted.

Therefore, where the entity supplies a service of social work and assesses the patient's state of health and determines a process to pursue to preserve, restore or improve the physical or psychological wellbeing of the patient and the social work profession generally accepts this treatment as appropriate, the requirements in paragraph 38-10(1)(c) of the GST Act are also met.

The entity meets the requirements of subsection 38-10(1) of the GST Act. Therefore, the supply of social work services by the entity is GST-free where the service is generally accepted in the social work profession as being necessary for the appropriate treatment of the recipient of the supply. [Note 1: The supply of a service that is not listed in the table in subsection 38-10(1) of the GST Act is not GST-free merely because it is supplied by a recognised professional in one of the services that are listed in the table in the subsection. It is only where a supply of a listed service is being made and the unlisted service is a standard technique or component of the supply of one of the listed services, and generally accepted in the relevant profession as such, that the provision of the unlisted service will satisfy paragraph 38-10(1)(a) of the GST Act. Note 2: Where an entity is not supplying a listed service but supplies a service that is a technique or component of one of the listed services, the supply will not satisfy paragraph 38-10(1)(a) of the GST Act. Note 3: Where an entity supplies a service or a component of a service that is not generally accepted in the relevant profession as being necessary for the appropriate treatment of the recipient of the supply, the requirement in paragraph 38-10(1)(c) of the GST Act will not be met and the supply will not be GST-free.]