What is a special disability trust?
The special disability trust is a Federal Government program that helps family members and guardians provide for the future of family members with a disability.
You can set up a special disability trust in your will, or while you are alive, to benefit your relative with disability.
Who can have a special disability trust?
A person with a severe disability who meets certain Centrelink or Veteran’s Affairs requirements can be a beneficiary of a special disability trust. The person might have severe physical, intellectual, psychiatric or behavioural disability or medical conditions.
Who can donate to the trust?
Anyone can donate to a special disability trust. Close family members who donate can be eligible for Centrelink or Veterans Affairs means tests concessions or gifting exemptions.
In some situations, the beneficiary may be able to contribute, such as if they receive an inheritance.
There is no limit on the value of assets a special disability trust can receive. Contributions of up to the first $500,000, can have gifting rule exemptions for eligible donors.
How do trust assets affect the beneficiary’s support payments?
The funds or assets given to a special disability trust will receive means test concessions for the beneficiary. This means that their support payments are affected as little as possible.
A concessional amount (set each year on 1 July) plus the beneficiary’s home (if it’s an asset of the trust) won’t be included when working out the beneficiary’s income support payments or pension. Any trust amounts over the concessional amount will be used to work out the person’s income support payments or pension.
What assets can be part of the trust?
Any assets that make income can be donated to the trust. This can include cash, shares, managed funds and rental properties. The trust can also include any assets that provide care and accommodation for the person, such as a house or unit, modified vehicle and wheelchair.
Donations or contributions must not have any conditions on them while the trust is running. When the trust ends, however, any funds or assets that are left are given back to the donors or in accordance with instructions they nominate.
Who can be a trustee?
Parents, brothers, sisters or friends of the beneficiary who are over 18 years of age and an Australian resident can be a trustee. You can also appoint a professional trustee company, such as State Trustees, or a legal, accounting or financial planning organisation.
How long can the trust run?
A special disability trust will only exist during the beneficiary’s lifetime. However, the trust may end if there are no more assets and income left or the trust no longer meets the necessary criteria.
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