Special Disability Trusts That Protect Your Child's Future

A special disability trust (SDT) is a trust recognised by the Social Security Act 1991 (Cth) that allows eligible contributors to fund reasonable care and accommodation for a person with severe disability - with significant Centrelink asset test and gift concessions.

Only one beneficiary per SDT, who must meet the statutory 'severe disability' definition. Eligibility usually requires that the person would qualify for the Disability Support Pension if not for assets, and can't work more than 7 hours per week at or above the minimum wage.

There's no absolute limit on the trust's value, but the asset test exemption is capped (the exemption threshold is indexed annually). Gift concessions for immediate family contributors are capped at a combined $500,000 and the gifting rules are specific.

'Reasonable care and accommodation' for the beneficiary. That's broad - housing, modifications, medical and dental care, therapy, some discretionary spending. A small 'discretionary amount' per year can also be used for other expenses.

As early as makes sense for your family. Many parents establish the trust during their lifetime and contribute gradually. Others build it into their will so it activates on death. Both approaches work.

Special Disability Trusts are quoted individually because the drafting depends on the beneficiary's circumstances, the approval requirements with Services Australia, and whether the trust is standalone or established through a Will. Sam will prepare a fixed-fee proposal after the initial consultation.