Most NDIS providers know their supports are “GST-free”, but far fewer know exactly why, and that is where problems start. A support is only GST-free if four conditions are met for that participant, that support and that period. Miss one and the supply is taxable, which can mean GST owing on income you never charged GST on. This guide explains the NDIS GST-free rules, the written agreement that holds it all together, and the traps we see most often in provider books.
The four conditions for a GST-free NDIS supply
Under the GST law, a supply to an NDIS participant is GST-free only if all of these are true:
- The participant has an NDIS plan in effect. The plan must be approved by the NDIA. It stops being effective when it is replaced or the person leaves the scheme.
- The support is reasonable and necessary and in the plan. It must be one of the supports listed in the statement of supports in the participant’s plan.
- There is a written agreement. The agreement must identify the participant and state that the supply is one or more of the reasonable and necessary supports in their plan.
- The support is covered by the NDIS Determination. The Minister’s GST-free NDIS supports determination lists the kinds of supports that qualify. The current determination applies to supplies made from 1 July 2021 to 30 June 2027.
Supplies beyond the time or quantity set out in the plan are not GST-free, even if the other conditions are met.
What the written agreement needs
The written agreement is the condition providers most often get wrong. It does not have to be a single signed contract. The ATO accepts a combination of documents, such as a service agreement, emails, letters, invoices or electronic records, as long as together they show a binding obligation to provide the support and that the support is in the participant’s plan. The agreement can be made with the participant, their plan manager, the NDIA or another person acting for them, such as a guardian.
In practice a good service agreement should name the participant and their NDIS number, list the supports by line item, refer to the plan dates, and be renewed whenever the plan is renewed.
Which supports are covered
The NDIS Determination works in two parts. Some supports qualify on their own, including specialist disability accommodation, assistance with household tasks, interpreting and translation, early childhood early intervention and plan management. Others, including assistance with personal activities, behaviour and therapeutic supports and home modifications, qualify only if they are also covered by one of the other GST-free health and care determinations. Most core supports delivered by support worker businesses fall within the determination, but it is worth checking any unusual line items.
Plan managed and self managed participants
- Plan managed: the supply is still made to the participant. The plan manager pays you from the participant’s funds and can sign the written agreement on the participant’s behalf. Plan management services themselves can be GST-free.
- Self managed: the participant can give you a letter identifying themselves and the plan support, and your written confirmation back can complete the written agreement.
- Agency managed: only registered providers can deliver to agency managed participants. The same four conditions apply.
Subcontractors are not GST-free
If you use contractors to deliver supports, your supply to the participant can be GST-free, but the contractor’s supply to you is not. A contractor who is registered for GST must charge you GST, and you claim it back as a GST credit on your BAS. This is a common source of confusion between providers and the independent support workers they engage.
Do NDIS providers need to register for GST?
You must register once your GST turnover reaches $75,000. GST-free supplies count towards GST turnover, so an NDIS business that only makes GST-free supplies can still be required to register. Once registered, you charge no GST on qualifying supports but can claim GST credits on business purchases such as vehicles, equipment, rent and software, which often means a refund on each BAS.
Common mistakes
- Service agreements that do not mention the participant’s plan or were not renewed when the plan changed
- Continuing to deliver after the plan ended or after the budget for a line item was exhausted
- Treating every sale as GST-free, including consumables, training or services to other providers
- Not claiming GST credits on purchases because “we are GST-free”
- Not keeping the agreements: the ATO can ask for them for five years
Frequently asked questions
Do I charge GST to a plan manager?
No, if the four conditions are met. The supply is to the participant, and the plan manager is paying on their behalf.
Is a signed service agreement enough?
Usually, if it identifies the participant and states the supports are reasonable and necessary supports in their plan. An agreement that only lists rates and hours, without referring to the plan, may not be.
What happens if a supply was not GST-free?
GST is payable on it, generally one-eleventh of the amount received if you did not add GST to the price. Correcting this early through your BAS is far cheaper than an ATO review.
NDIS accounting in Melbourne’s west
Kennedy Tax & Business Services prepares BAS, bookkeeping and tax returns for NDIS providers across Footscray, Williams Landing and Melbourne’s west, including reviewing service agreements and GST coding. See our NDIS financial services or contact us to book an appointment.
This article is general information only and does not take into account your circumstances. Based on ATO guidance on GST and the NDIS current at October 2026. Speak to a registered tax agent before acting.
