ASK DSC: Are service agreements required for unregistered providers?

Question: I’m an unregistered sole trader delivering group supports in the community. Do I really need a service agreement to deliver NDIS services? It’s such a pain.

Unless you are a registered NDIS provider, there is no requirement for you to have service agreements.

Registered NDIS providers who need to comply with the Core modules from the Certification section of the NDIS Practice Standards must be able to demonstrate that ‘each participant has a clear understanding of the supports they have chosen and how they will be provided.’ This should be in the form of a service agreement but doesn’t need to be a written document.

Currently, the only service type that requires written service agreements is Specialist Disability Accommodation supports.

What about for taxation purposes?

There is a common misconception that a written service agreement is required for NDIS fees to be GST-free. The Australian Tax Office (ATO) does state that a written agreement must be in place. However, this does not necessarily mean a written service agreement. What the ATO is looking for is some way of confirming:

• Who the person is and that they are an NDIS participant
• That the supports or services provided are a reasonable and necessary support, in the participant’s NDIS plan

The ATO lists forms of evidence as things such as letters, emails, receipts or invoices. Refer to the ATO’s website for further details, including some helpful examples at National Disability Insurance Scheme | Australian Taxation Office.

So why would a provider have a service agreement?

Well, the NDIS recommends that all providers have service agreements with each participant, and for good reasons.

Sally discusses this more in her article ‘Let’s make service agreements cool,’ but basically, a service agreement helps participants and providers:

• Establish a shared understanding
• Mitigate and manage risks (including the risk of not getting paid)
• Support communication between the two parties

If you decide not to pursue a written service agreement, consider how you might discuss shared expectations as part of your intake and review practices. This might involve setting aside time to discuss what you both expect and then taking notes of what has been covered.

If you do decide to develop a written template, make sure it is simple and user-friendly. There’s nothing I like less than to see wordy legalistic service agreements. They totally miss the point of why you have them in the first place.

If you would like to dig a bit deeper check out the NDIS website Service agreements | NDIS. They have developed an easy-read document for participants, which may be a good resource when explaining the purpose of a service agreement with your clients.

DSC has a new e-learning on service agreements to help you get them right from the start. Available to purchase for $55 or free for On-Demand subscribers (along with access to our whole library of e-learnings and webinars). Learn more: Service Agreements | DSC On-Demand Learning.

DSC have put out some great articles on the subject, including Let’s make service agreements cool | Team DSC and Everything You Need To Know About Service Agreements | Team DSC.

Also, DSC are currently running a workshop Service Agreement Refresh: Adapting to the Changing NDIS | Team DSC.