Booklet: Special Disability Trusts (SDT) (Chapter 7 – What is the effect of the ‘gifting concession’?)

Booklet: Special Disability Trusts

Below is Chapter 7 of our ‘Special Disability Trusts’ booklet. To read the other chapters of our booklet, click the links below:

Please note that the information in this booklet is current as at the 2024/2025 financial year.

Any gift to an SDT must be unconditional and made without expectation of receiving any payment or benefit in return.

To prevent a beneficiary from putting their own property into an SDT, compensation received by or on behalf of the principal beneficiary cannot be contributed to the trust.

A ‘gifting concession’ can be claimed by certain contributors to the SDT. The effect of the gifting concession is that the gift is disregarded for the purposes of the contributor’s social security means testing.

The gifting concession can be claimed by:

  • Immediate family members of the beneficiary who are at, or over, age or service pension age and are receiving a pension (for example Age Pension, Carer Payment); and
  • Immediate family members who are within 5 years of age pension age or over age service pension age and are not on a pension may still contribute to a Special Disability Trust and take advantage of the gifting concession later when reaching qualifying age, provided the gifting concession has not been fully used.

Immediate family members are:

  • Parents of the beneficiary (including adoptive and step parents);
  • Legal guardians of a minor beneficiary, or people who were legal guardians of the beneficiary when the beneficiary was a minor;
  • Grandparents of the beneficiary; and
  • Brothers and sisters of the beneficiary (including adoptive and step brothers and sisters and half brothers and sisters).

The total gifting concession per SDT is $500,000, as opposed to an ordinary trust gifting concession of $10,000. When the gifting concession has been fully used, any additional contributions by immediate family members will be assessed under the normal gifting rules. Where there is more than one contributor to the SDT, the available concession first applies to those eligible family members who are receiving an age pension or a service pension.

To download a PDF of our booklet, enter your email below.

 

The information contained in this post is current at the date of editing – 11 September 2024.

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