Booklet: Special Disability Trusts (SDT) (Chapter 6 – What are the advantages of an SDT?)

Below is Chapter 6 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 3 – What can an SDT pay for?
• Chapter 4 – What are the eligibility criteria of an intended beneficiary?
• Chapter 5 – Do you need medical reports confirming the disability?
• 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 2026/2027 financial year.

An understandably concerning question that families of people with disability often have is, “What will happen when I can no longer provide care?”

The key benefits of an SDT are:

• Forward planning: Legal planning can ensure that the ongoing needs of a beneficiary continue to be met, even in circumstances where family members or a primary carer can no longer provide assistance.
• Control of assets: A trustee has a legal obligation to safeguard and hold the assets for the benefit of the beneficiary.
• Social security:
  • A gifting concession of up to $500,000 (combined) is available for eligible immediate family members of the principal beneficiary; and
  • An assets test assessment exemption of up to $862,750 (current as at the 2026/2027 financial year and indexed each year on 1 July) is available to the principal beneficiary.
• Taxation benefits and exemptions:
  • Net income on trust assets is taxed at a lower personal income tax rate;
  • Capital Gains Tax exemptions; and
  • Special Disability Trusts are exempt from the 30% minimum tax rate which will apply to discretionary trusts beginning 1 July 2028.

The information contained in this post is current at the date of editing – 28 July 2026.