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?
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, however only immediate family members will be eligible for Centrelink social security means tests or gifting rule exemptions.
Typically, funds donated into a Special Disability Trust receive generous Centrelink means test concessions for the beneficiary and attract fewer gifting restrictions on behalf of eligible donors.
Immediate guardians and family members can contribute trust assets up to $500,000 value, without reducing either their social security entitlements or the child’s income support payments.
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.