Special Disability Trusts - Greater Accessibility - Budget 2010-11

Key Elements

  • This measure will:
    • allow eligible people with a disability to work up to seven hours a week in the open labour market and still qualify as a beneficiary of a Special Disability Trust;
    • significantly expand what trust funds can be used for such as all medical expenses, including membership costs for private health funds, and maintenance expenses of Special Disability Trust assets and properties;
    • allow the trust to undertake a level of discretionary spending that is not directly related to care and accommodation needs of the beneficiary to increase social and community participation. This will be capped at $10,000 in a financial year; and
    • in two years, the Government will also review the concessional limit of Special Disability Trusts, the eligibility for Special Disability Trust gifting concessions, and who can request trust audits.
  • Changes will take effect from 1 January 2011 and will be ongoing.
  • Special Disability Trusts will be a more attractive vehicle for families to provide financial provision for a family member with disability. The changes will also benefit existing trust beneficiaries who will have more flexibility.
  • This measure delivers on the Commonwealth’s commitment to help support people with disability, their families and carers by encouraging an increase in the uptake of Special Disability Trusts by making them more flexible and removing onerous administration.
  • People with disability benefit by getting greater financial security for their future care and accommodation needs and from social security means test concessions.
  • It is estimated that this measure will result in a twenty per cent increase in Special Disability Trusts, equivalent to 78 additional beneficiaries. As at March 2010, 91 trusts were in operation and an additional 332 had been granted beneficiary status – this means someone is eligible to be a beneficiary of a Special Disability Trust, however; the Trust is yet to be established.

Background

  • Special Disability Trusts were established in 2006 to assist family members, who have the financial means to do so, to make private financial provision for the current and future care and accommodation needs of their family member with severe disability.
  • The Senate Standing Committee on Community Affairs inquired into why more families were not making use of Special Disability Trusts and tabled its report ‘Building trust: Supporting Families through Disability Trusts’ on 16 October 2008.
  • In its response the Commonwealth Government agreed to a number of taxation concessions and to review recommendations from the Senate Committee including broadening the eligibility requirements to make it easier for people to establish Special Disability Trusts.
  • This measure helps address barriers to families using Special Disability Trusts as identified in the Committee’s report.

Implementation

  • Legislative amendments are required and changes will take effect from 1 January 2011 and will be ongoing.

Total Government Funding

  • $1.0 million over four years from 2010-11 to 2013-14.

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