GST and the supply of nanny services

Is the entity, a registered carer, making a GST-free supply under section 38-140 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it provides nanny services in a client's home?

Yes, the entity is making a GST-free supply under section 38-140 of the GST Act when it provides nanny services in a client's home.

The entity is a registered carer within the meaning of section 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 (FAA Act) and is registered with the Family Assistance Office as a care provider. The entity is also registered for goods and services tax (GST).

The entity makes supplies of nanny services for a fee. The activities are undertaken in and around the client's home rather than at an established child care centre. The activities undertaken by the nanny are restricted to those of taking care of and supervising the client's children.

Section 38-140 of the GST Act provides that a supply is GST-free if it is a supply of child care by a registered carer (within the meaning of section 3 of the FAA Act).

The term 'child care' is not defined in the GST Act or in the FAA Act and therefore, it is appropriate to consider its ordinary meaning. The Macquarie Dictionary , 1997, 3rd edn, The Macquarie Library Pty Ltd NSW, defines the term 'child care' as 'professional superintendence of children' and The Australian Oxford Dictionary, 1999, Oxford University Press, Melbourne, defines 'child care' as 'the care of children, esp. in a crèche'.

The entity supplies nanny services to a client. These services only involve taking care of and supervising the client's children. These activities are undertaken in and around the client's home rather than at an established child care centre. However, there is no requirement within the meaning of child care or in section 38-140 of the GST Act that the services must be provided in a child care centre. Therefore, the entity's supply is of child care.

As the entity is a registered carer within the meaning of section 3 of the FAA and the nanny services it supplies are 'child care', the entity is making a GST-free supply under section 38-140 of the GST Act. Note. If the entity also performs any significant housekeeping duties (that is, the housekeeping is not integral, ancillary or incidental to the supply of child care) the entity would be making a mixed supply that would be partly taxable and partly GST-free. If the entity does make a mixed supply, it would need to apportion the fee received between the taxable and GST-free parts of the supply. Guidance on when something is integral, ancillary or incidental and how to apportion the fee can be found in Good and Services Tax Ruling GSTR 2001/8.