Special Disability Trust
A special disability trust allows parents and family members to make provision for a severely disabled person. A special disability trust may be set up as part of your estate planning either in your Will or by a trust during your lifetime. There are strict requirements for the establishment of a Special Disability Trust.
The trust must be for the sole purpose of providing for the maintenance and care of a disabled person in order to receive concessional treatment under the Social Security Act 1991 (Cth). Gifts made in a special disability trust will not reduce the beneficiaries Centrelink entitlements due to means testing.
The requirements for establishing a special disability trust are:
• There can be only one principle beneficiary of the trust;
• The principle beneficiary is either:
º Under 16 and profoundly disabled;
º Over 16 and qualifies for a disability support pension or equivalent;
• The sole purpose of the trust must be to meet the reasonable care and accommodation needs of the beneficiary;
• The trust deed must comply with the regulations.
The principal beneficiary is unable to transfer assets to the trust themselves, unless the transfer is within three years from receiving the asset from an estate, or is a superannuation benefit.
It is important to consider who you want to act as the trustee of the trust. The trustee must provide Centrelink with annual financial statements of the trust to meet the requirements for concessional treatment.
A special disability trust may be an effective way for you to provide for a disabled family member without reducing their Centrelink benefits. Please contact our office for more information.
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