Setup and administer a Special Disability Trust
We establish and advise on the administration of Special Disability Trusts, ensuring the care and accommodation protections it was designed to provide.
What is a Special Disability Trust and how does it work?
A Special Disability Trust is a specific type of trust established under the Social Security Act 1991 (Cth) (the Act) to hold assets for the care and accommodation of a person with a severe disability. The trust provides concessional treatment for social security purposes, including exemptions from means testing for the principal beneficiary and gifting concessions for family members who contribute up to the applicable cap. To qualify, the trust must meet specific requirements set out in the Act, including requirements relating to the trust deed, the beneficiary, the trustee, and the permitted uses of trust funds. The trust must be administered consistently with the permitted expenditure rules, and the trustee is required to obtain an independent audit each year. We establish Special Disability Trusts that meet the legislative requirements and advise trustees on their ongoing administration obligations.
Who can be the principal beneficiary of a Special Disability Trust?
The principal beneficiary of a Special Disability Trust must be a person who meets the definition of severe disability under the Social Security Act 1991 (Cth), which requires that the person has a permanent and severe disability and is unlikely ever to be able to work in open employment. The beneficiary must also be of pension age or older, or if under pension age must be receiving a qualifying payment. We advise on whether a proposed principal beneficiary meets the eligibility criteria before the trust is established.
What can trust funds be used for in a Special Disability Trust?
The funds held in a Special Disability Trust can only be used for the reasonable care and accommodation needs of the principal beneficiary, as defined by the permitted expenditure rules under the Social Security Act 1991 (Cth), with limited discretionary spending permitted within the caps set by the legislation. Expenditure outside the permitted categories can put the trust’s concessional status at risk. We advise trustees on what expenditure is permitted and assist in ensuring the trust’s funds are used in compliance with the permitted expenditure rules.
What are the annual obligations of the trustee of a Special Disability Trust?
The trustee of a Special Disability Trust is required to obtain an independent audit of the trust’s accounts each year and provide it to Services Australia, as required by the Social Security Act 1991 (Cth). The trustee must also ensure the trust continues to comply with the legislative requirements, including the permitted expenditure rules and the conditions relating to the trust deed and the beneficiary. We advise trustees on their annual obligations and assist in managing the audit and compliance requirements.
What happens if a Special Disability Trust does not comply with the legislative requirements?
A Special Disability Trust that does not comply with the legislative requirements under the Social Security Act 1991 (Cth) may lose its concessional status, which means the assets held in the trust may become assessable for social security purposes and the gifting concessions for family members may be reversed. Non-compliance can also result in the trust being required to be restructured or wound up. We advise on compliance and assist in identifying and addressing any issues before they affect the trust’s standing.
Trust established to meet the legislative requirements from the outset.
Permitted expenditure advice so trust funds are used correctly.
Annual compliance obligations managed so the trust retains its concessional status.
A Special Disability Trust only protects the person it was established for if it is correctly set up and consistently administered.
A Special Disability Trust provides real protection for the person who needs it most, but only if it is established and run in strict compliance with the legislation.
- We will advise on the eligibility requirements and whether the proposed principal beneficiary qualifies.
- We will establish a Special Disability Trust that meets the requirements of the Social Security Act and the trust deed requirements.
- We will advise the trustee on permitted expenditure rules and how to document expenditures correctly.
- We will assist in managing the annual audit and reporting obligations to maintain the trust's concessional status.
You want to know that the person you love most will be cared for after you are no longer there to do it, but a Special Disability Trust only delivers that certainty if it is established and run correctly from the start.
Most families who establish a Special Disability Trust are not primarily thinking about tax concessions. They are thinking about what happens when they are gone. The trust is the mechanism they put in place so that a child, a sibling, or a family member with a severe disability continues to have access to stable care and accommodation.
But the trust’s concessional status depends on strict compliance with the permitted expenditure rules, the deed requirements, and the annual obligations. A trust that loses that status does not just create a tax problem. It fails the person it was set up to protect.
What's included in your Special Disability Trust service
- Eligibility assessment and beneficiary qualification advice.
- Trust deed drafting to meet legislative requirements.
- Permitted expenditure rules advice and documentation.
- Annual audit and reporting obligations management.
- Ongoing compliance and administration advice.
What goes wrong when Special Disability Trusts are not correctly established or maintained?
Here is how we establish and administer your Special Disability Trust to protect its concessional status.
Eligibility confirmed, trust established, compliance maintained.
Assess eligibility.
We advise on whether the proposed principal beneficiary qualifies and what the trust deed needs to address.
Establish the trust.
We draft the trust deed to meet the legislative requirements and manage the establishment of the trust.
Maintain compliance.
We advise on permitted expenditure, assist with annual audit obligations, and advise on ongoing compliance so the trust retains its concessional status.
Lawyers experienced in Special Disability Trusts, disability care planning, and trust administration across Australia.
We understand you want to know the cost, before we get started.
We will map out our process, from beginning to end, so you know what the journey will look like before you get started.
We will provide you with a clear and detailed Work Proposal covering each step along the way.
Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.
Our great lawyer guarantee
We want to be part of your team over the long term. We achieve this by adhering to these core principles:
Take the time
We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.
Share our knowledge
We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.
Stick to our knitting
We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.
Work as one team
Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.
Fair pricing
For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.
It's your show
We're not in this for our egos. We're in it for a front row seat to witness your success.
