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Monday, 5 March 2001
Page: 25061

Mr Mossfield asked the Minister for Health and Aged Care, upon notice, on 10 October 2000:

(1) Is he aware that the GST is being charged on Vitalcall services adding around $56 to the cost of this potentially lifesaving service.

(2) Does he acknowledge that Vitalcall is an essential health service for sick and elderly people in the event of serious illness or accident.

(3) Did he or his department raise this matter with the Treasurer or his department at any stage during the drafting of the GST legislation; if not, why not.

(4) Will he act to ensure that the GST is removed from this service for elderly people; if not why not.

Dr Wooldridge (Minister for Health and Aged Care) —The answer to the honourable member's question is as follows:

(1) Vitalcall is one of a range of `medical alert' services available to assist in maintaining the safety of the elderly and disabled. Vitalcall consists of two components: a `medical alert device', and an accompanying `monitoring service'.

GST does not apply to the `medical alert device' component. Schedule 3 under Section 38-45 Medical aids and appliances, of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act), lists `medical alert devices' (item 33) as GST-free.

The monitoring component is also GST-free in many cases where a Vitalcall service is part of an essential health service or is used to assist frail elderly or people with a disability to remain in their homes:

· if a nurse is monitoring the `medical alert device' and provides advice as part of a treatment program, it may be GST-free (Section 38-10(1) of the GST Act);

· if the monitoring of a `medical alert device' is provided by an ambulance service, it will be GST-free (Section 38-10(1) of the GST Act);

· if the supplier of the service receives funding under the Home and Community Care Act 1985, it will be GST-free (Section 38-30(2) of the GST Act);

· if the supplier of the monitoring service receives a community care subsidy under Part3-2 of the Aged Care Act 1997, it will be GST-free (Section 38-30(1) of the GST Act);

· if the supplier receives funding from the Commonwealth, a State or a Territory for providing a monitoring service to a person who is frail aged, or has a moderate, profound or severe disability (including addiction to a drug) and who lives at home and would be at risk of prematurely or inappropriately needing long term care in a hospital or other institution or would require residential care within the meaning of the Aged Care Act 1997, it will be GST-free (GST-free Supply (Care) Determination 2000-Section 38-30(4) of the GST Act); and

· if the supplier receives funding under the Disability Services Act 1986 (or a complementary State or Territory law), for providing a monitoring service it will be GST-free (Section 38-40).

In other cases, GST will apply at the rate of 10% of the cost of the monitoring service, which may vary across services.

(2) The Minister does acknowledge that Vitalcall and similar services provide a valuable service to enable elderly and disabled people to remain safely in their own homes, and to be assisted promptly in case of accident or illness.

(3) During the drafting of the GST legislation, there was much consultation between the Department of Health and Aged Care, Treasury, the Australian Taxation Office (ATO) and other government departments regarding the scope of GST legislation in relation to the health sector including in the area of medical aids and appliances. As a result, `medical alert devices' were indeed included in the Schedule of GST-free items (Schedule 3 of Section 38-45 of the GST Act).

(4) As indicated above, `medical alert devices' are not subject to GST. In addition, there are many circumstances where the monitoring component may also be supplied GST-free. The ATO has ruled that, outside the specific circumstances identified above, the monitoring component of a `medical alert' service is subject to GST.