Below is Chapter 3 of our ‘Special Disability Trusts’ booklet. To read the other chapters of our booklet, click the links below:
- Chapter 1 – What is an SDT?
- Chapter 2 – What are the requirements of an SDT?
- Chapter 4 – What are the eligibility criteria of an intended beneficiary?
- Chapter 5 – Do you need medical reports confirming the disability?
- Chapter 6 – What are the advantages of an SDT?
- Chapter 7 – What is the effect of the gifting concession?
- Chapter 8 – What is the effect of the assets test assessment exemption?
- Chapter 9 – Are there beneficial taxation consequences?
- Chapter 10 – What are the administrative requirements of an SDT?
- Chapter 11 – Are there investment restrictions on an SDT?
- Chapter 12 – What are the ongoing obligations of an SDT?
- Chapter 13 – Summary
Please note that the information in this booklet is current as at the 2024/2025 financial year.
An SDT can pay for all of the beneficiary’s reasonable accommodation and reasonable care expenses.
‘Reasonable accommodation expenses’ may include:
- Payment of rent or purchase of the primary place of residence of the beneficiary, if the payment is not made to an immediate family member of the beneficiary;
- Modification to the beneficiary’s place of residence arising from his or her disability;
- Maintenance of trust property assets to keep the property in comparable condition or a condition that is safe to use (excluding replacement); and
- Fees relating to the accommodation of the beneficiary residing in a residential care service.
The test for ‘reasonable care expenses’ is quite strict: the expense has to be closely tied to the beneficiary’s disability. For example reasonable care expenses may include a modified vehicle, sleeping and sensory aids and specialised food. All medical and dental expenses (including private health fund membership, ambulance cover, medicines, surgery, and specialist and general practitioner services) are deemed to be reasonable care expenses.
In addition to these expenses, the SDT can fund discretionary spending up to the set limit. For the current financial year 2024/2025, the limit for discretionary spending is $14,500. This figure is adjusted to CPI on 1 July in each year. ‘Discretionary spending’ includes things such as ordinary food, vehicle registration and petrol, toiletries, recreation and leisure activities, property insurances (including building, contents and vehicle), payment of utilities, and non-specialised clothing and footwear.
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The information contained in this post is current at the date of editing – 11 September 2024.