What is a Special Disability Trust?
The Special Disability Trust is a Federal Government initiative aimed at helping immediate family members and guardians provide for the future of family members with a disability. A Special Disability Trust can be established via a Will, or can be established by living family members to benefit their disabled relative.
Who qualifies for a Special Disability Trust? Who can donate to the Trust?
An individual with a severe disability (e.g. severe physical, intellectual, psychiatric or behavioural disability or medical condition) who meets certain Centrelink or Veteran’s Affairs qualifications will qualify as beneficiary of a Special Disability Trust.
Who can donate to the Trust?
Anyone can donate to a Special Disability Trust. Immediate family members who contribute can be eligible for Centrelink/Veterans Affairs means tests concessions or gifting rule exemptions.
In certain circumstances the beneficiary themselves may be able to contribute, for example if they receive an inheritance.
There is no limit on the value of assets a Special Disability Trust may receive. Contributions of up to the first $500,000 value can attract gifting rule exemptions on behalf of eligible donors.
How are the Trust assets assessed in relation to the beneficiary?
The funds or assets contributed to a Special Disability Trust receive generous means test concessions for the beneficiary.
A concessional amount (indexed each year on 1 July) plus the beneficiary’s principal residence (if it is an asset of the trust) will be exempt when calculating the beneficiary’s income support payments/pension. Any amounts that are part of the trust in excess of the concessional amount will be assessed for income support payments/pension.
What assets can be part of the Trust?
Any assets producing income, for example, cash, shares, managed funds, rental property, or any assets that provide care and accommodation, for example, house or unit, modified vehicle, wheelchair, can be donated to the trust. Donations or contributions must be unconditional during the course of the trust, but when the trust ends, any remaining funds or assets are then returned to the donors or in accordance with instructions they nominate.
Who can be a trustee?
Parents, siblings or friends of the beneficiary who are over 18 years of age and an Australian resident can be a trustee. You may also like to appoint a professional Trustee Company such as State Trustees, or a corporation that specialises in legal, accounting or financial planning.
How long can the trust operate?
A Special Disability Trust will only exist for the beneficiary’s lifetime. However the trust may cease to operate if the assets and income are depleted or the trust no longer meets the qualifying criteria.