How Do I Setup a Special Disability Trust?

There are several steps that you need to take to setup a Special Disability Trust. The first step is to get legal advice from someone who specialises in Special Disability Trusts. A lawyer can help you ensure that the trust deed complies with all legal requirements. Secondly you should get accounting and financial planning advice.

You will need to appoint a trustee to manage the trust and look after the interests of the beneficiary. Once a trustee is appointed, the Trust must be registered with either Centrelink or the Department of Veterans Affairs (DVA), depending upon which government body the beneficiary receives or is eligible to receive social security payments.

Who can contribute to the Special Disability Trust?

Once the Special Disability Trust is established then people can make contributions to the assets of the Trust. However, each financial year the government determines the amount of assets a Special Disability Trust can hold without it impacting on the government payments of the beneficiary. The rate as of 1 July 2024 is $813, 250 and this is reviewed every year.

How is a Special Disability Trust Managed?

It is important that the Trust is managed in accordance with the trust deed and legal requirements. Some of the legal requirements include informing Centrelink or DVA if:

• Gifts are made to the trust
• The trustee changes
• The trust is not complying to the rules and requirements of a Special Disability Trust
• The beneficiary starts paid employment
• The beneficiary dies.

Financial statements about the Special Disability Trust must also be prepared at the end of the financial year. This includes:

1. Balance sheet
2. Profit and loss statement
3. Depreciation schedule for each asset for the financial year
4. Tax return for each financial year.

The trustee will then need to sign a statutory declaration to confirm that:

• The expenditure of the trust for that financial year was spent on the care and accommodation of the beneficiary. Reasonable expenditure of the cost of the trust itself, is also acceptable.
• The expenditure of the trust was not spent on day to day living expenses of the beneficiary or payments to immediate family members.
• That the information provided is true and accurate.

The financial statements and statutory declaration must be submitted to Centrelink or DVA by March 31 each year.

Does the Special Disability Trust need to be audited?

The Special Disability Trust may be audited by an independent party. The request of an audit will be based on the previous financial year, or another period determine by legislative requirements. The audit can be requested by:

• The beneficiary
• Immediate family members
• A legal guardian
• Financial administrator of the beneficiary.

If an audit is requested, it must be made in accordance with legislative requirements set out in the Social Security Act or the Veteran’s Entitlement Act. The auditor must not be an immediate family member or the person who prepared the financial statements.

Contact us for a free thirty-minute consultation with a lawyer who can assist you in establishing a Special Disability Trust.

We recommend Price Financial Intelligence if you require any financial assistance.

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Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.