Australia makes services funded under the Disability Services and Inclusion Act 2023 GST-free, backdated to 2024

What changed in detail

The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 (No. 72, 2025) received Royal Assent on 4 December 2025. Under the commencement table in section 2, Schedule 4, Part 2 commences on 1 January 2026. It makes three groups of GST changes.

Division 1, specialist disability services, amends section 38-40 of the A New Tax System (Goods and Services Tax) Act 1999. The existing text becomes subsection (1), and its reference to the Disability Services Act 1986 now reads “former”. Item 34 adds a new subsection 38-40(2): a supply of services is GST-free if the supplier receives funding under the Disability Services and Inclusion Act 2023, or under a complementary State or Territory law, in respect of those services. Item 35 applies the new subsection to supplies made on or after 1 January 2024.

Division 2 replaces section 29-10(4) with an election to attribute input tax credits that were not taken into account in an assessment to a later tax period, with a parallel rule for fuel tax credits. Division 3 amends attribution rules.

What it means

The GST-free status of funded disability services had depended on a reference to the Disability Services Act 1986, which the Disability Services and Inclusion Act 2023 replaced. The amendment brings services funded under the 2023 Act into the exemption.

It is backdated. Although the subsection commenced on 1 January 2026, it applies to supplies from 1 January 2024. Providers that charged or remitted GST on such funded services in 2024 and 2025 may need to review those supplies and consider adjustments with the ATO. The provision is in force, and no later amendment has been identified.