National Disability Insurance Scheme (NDIS)

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From 1 July 2013, DisabilityCare Australia (the National Disability Insurance Scheme (NDIS)) will progressively become available to eligible people with a disability (that is, participants) in different locations of Australia.

If you are an NDIS participant, this information outlines your income tax implications and obligations.

NDIS Participant 

Income tax
Payments of NDIS amounts you receive directly from DisabilityCare Australia, for approved reasonable and necessary supports under your plan, are exempt from income tax.
You are also exempt from income tax on any NDIS amounts you are treated as having received when NDIS amounts are provided to another person on your behalf, such as:
  • your support provider
  • a registered plan management provider (RPMP).
You cannot claim deductions, depreciation of capital assets, or certain other capital expenditure (that you might otherwise have been allowed) if the purchase of those assets or that expenditure has been funded using NDIS amounts that are exempt from income tax.
NDIS participants who engage care providers - employer obligations
If you engage an attendant carer or a support person directly under a self-management plan, depending on the nature of the arrangement (volunteer, employee or independent contractor), you may be required to undertake the responsibilities that fall to an employer, such as withholding amounts from payments under the pay as you go (PAYG) withholding system.

Representing an NDIS participant

If you are a representative of an NDIS participant, this information outlines your income tax implications and obligations.

Income tax

A representative of an NDIS participant includes someone who is managing a participant’s plan or a RPMP.
The income tax treatment for an amount you receive as a representative of an NDIS participant will depend on the capacity in which you receive the amount.
Nominated representative
If you are a representative (such as a nominee, parent or guardian) nominated to manage a participant's plan and you receive an NDIS amount:
  • on behalf of the participant (as agent or trustee), it is not ordinary income in your hands
  • for your own benefit, for services you will or have provided for the participant under an arrangement with the participant, then that amount may be assessable in your hands as ordinary income.
Registered plan management provider
If as an RPMP you receive an NDIS amount as agent/trustee and it is:
  • not received by you as payment for any services you provide, the amount will not be ordinary income in your hands
  • received by you as payment for any services you provide, it will be assessable as ordinary income.

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started!

Copyright 2014. My Tax Zone.