Action for Service Providers
Service providers should be reporting the cost of services separately to any GST component. The GST should not be included as part of an injured worker’s entitlement and should be identified by the provider as a separate expense on any invoice.
There should be no transactions for GST affecting injured workers’ entitlements, and insurers and self-insurers should not be including any GST component in the service costs reported to WorkCover WA as part of the claims data specifications for Q1.
The Workers’ Compensation and Injury Management (Scales of Fees) Amendment Regulations 2007 (the Amendment Regulations) were published in a Special Government Gazette on 7 December 2007, with an effective date of 8 December 2007.
The Amendment Regulations inserted a new regulation (r.10) into the Workers’ Compensation and Injury Management (Scales of Fees) Regulations 1998, which states:
"10. Effect of GST
(1) In this regulation "GST" has the meaning given in A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth.
(2) An amount fixed by these regulations is a net figure that does not include any GST that may be imposed due to the nature of the provision of the service or the service provider.
(3) If GST is payable on a service listed in these regulations, the fee for the service is the applicable fee increased by 10%.
(4) An injured worker's prescribed entitlements are to be calculated using the net cost of the treatment or service, without deducting any GST component."
This new regulation clarifies a long-standing policy position of WorkCover WA that GST is not to be deducted from injured workers’ entitlements. Information to this effect was communicated to stakeholders in 2000, prior to the introduction of GST. The new regulation also serves to clarify that recommended fees for medical and allied health services are scheduled exclusive of any GST that may be payable.
WorkCover WA does not have the capacity to provide legal advice and is not in a position to provide an interpretation of the requirements of the Australian Taxation Office (ATO) on the application of GST to medical and allied health fees. As the ATO is the department that administers the GST legislation, its role includes providing advice and guidance on the application of GST. WorkCover WA encourages stakeholders to seek advice from the ATO in this regard.
Insurers and service providers are to have regard to the A New Tax System (Goods and Services Tax) Act 1999 in determining which services attract GST.
The ATO prepared a case study entitled Health Industry Partnership - GST and Workers’ Compensation in consultation with the Insurance Council of Australia and the Australian Medical Association. The case study sets out principles that medical practitioners and workers’ compensation insurers can use to determine the GST status of supplies made by medical practitioners to workers’ compensation claimants.
The ATO also provides advice and private tax rulings to individuals upon request. The case study and private tax rulings can be viewed at the ATO website at www.ato.gov.au.
Further advice can be sought from:
GST Health Industry Team
GPO Box 9990
Chermside Qld 4032