Allied health third party reports and GST

The short answer

An allied health report written for a third party is usually subject to GST, because the recipient is not the patient and the purpose is not their treatment. Section 38-10 of the GST Act only makes a health service GST-free when it is necessary for the appropriate treatment of the recipient of the supply. Reports to insurers, CTP operators, government agencies and NDIS participants can still qualify under specific rules.

Sources
A New Tax System (Goods and Services Tax) Act 1999 (Cth), sections 38-10, 38-38 and 38-60
Australian Taxation Office, GST and health, Supply of services through a third party
Australian Taxation Office, GST and health, Other health services
A New Tax System (Goods and Services Tax) (GST-free Supply, National Disability Insurance Scheme Supports) Determination 2021

The recipient of the supply

Physiotherapy, occupational therapy, speech pathology, psychology, dietetics, podiatry and other listed services are GST-free under section 38-10 of A New Tax System (Goods and Services Tax) Act 1999 when a recognised professional delivers them as appropriate treatment of the recipient of the supply. The ATO's health guidance notes that the recipient is not always the patient and may be another business. If an employer orders a fitness for work assessment, a lawyer commissions an expert report, or a court requests an opinion, that organisation is the recipient and the report is not treatment of anyone. The supply is taxable, and registered practices charge 10 percent GST.

Insurers, CTP operators and government agencies

Section 38-60 treats certain third party supplies as GST-free where the underlying service would have been GST-free if supplied to the patient. It covers supplies to an insurer settling a claim under an insurance policy, to a compulsory third party scheme operator, and to an Australian government agency. In practice this means a treatment plan or progress report requested by a workers compensation or motor accident insurer about a client you are treating is usually GST-free. An independent medical examination arranged to dispute a claim is not, because it was never treatment. The parties can also agree in writing to treat the supplies as taxable, which some schemes prefer.

Reports funded by the NDIS

Reports for NDIS participants follow section 38-38 rather than the treatment test. A supply is GST-free when the participant has a plan in effect, the report is a reasonable and necessary support in the statement of supports, there is a written agreement identifying the participant and the supports, and the supply is covered by the GST-free Supply (National Disability Insurance Scheme Supports) Determination 2021. Therapy assessments and NDIA requested reports funded from the plan typically qualify. If the NDIA or another agency commissions a report outside the plan, look instead at whether section 38-60 applies to an Australian government agency.

Working it out for each report

Ask three questions before invoicing. Who contracted you for the report? What is it for? Would the service have been GST-free if the patient had asked for it? Record the answers in the file. Where one engagement mixes treatment and a third party report, split the invoice so each line carries the right tax code. Workers compensation and CTP schemes are state-based and publish fee orders that usually state the GST position, so check the scheme in your state. If turnover is under the registration threshold you cannot charge GST, but report income counts towards that threshold. When in doubt, seek ATO advice.

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