Special Disability Trusts

A Special Disability Trust is a trust established primarily for succession planning by parents and immediate family members for the current and future care and accommodation needs of a person with a severe disability or medical condition. 

The trust can pay for any care, accommodation, medical costs and other needs of the beneficiary during their lifetime. Anyone can establish a trust for an eligible severely disabled beneficiary.

A Special Disability Trust must meet the following requirements:

  • have only one beneficiary (that is the person for whom the trust is established)
  • the beneficiary must meet all eligibility criteria
  • the primary purpose must be to provide only for the accommodation and care needs of the beneficiary
  • have a trust deed that contains the clauses as set out in the model trust deed
  • have an independent trustee, or alternatively have more than one trustee
  • comply with the investment restrictions
  • provide annual financial statements and,
  • conduct independent audits when required.

If you have a Special Disability Trust, you may get a gifting concession and assets test assessment exemption.

The two benefits of a Special Disability Trust are that:

  • a gifting concession of up to $500,000 combined is available for eligible family members of the principal beneficiary
  • an assets test assessment exemption of up to $694,000 (indexed 1 July each year) is available to the principal beneficiary.

The funds of a Special Disability Trust are intended to meet the reasonable care and accommodation needs of the principal beneficiary.

The trustee is able to:

  • pay for the beneficiary’s dental and medical expenses, including membership costs for private health funds
  • pay the maintenance expenses of the trust-property assets
  • spend up to $12,250 for the 2019/2020 financial year on discretionary items not related to the care and accommodation needs of the beneficiary. This expenditure should remain compliant with the legislative requirements of a Special Disability Trust

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