4.14.3.40 Means testing of special disability trusts

Summary

This topic contains information on the following:

  • assets test assessment
  • assessment of assets above the asset value limit
  • assessment of primary residence in special disability trust
  • income test assessment, and
  • winding-up of the trust - death of principal beneficiary.

Assets test assessment

For a special disability trust, the principal beneficiary is the only attributed stakeholder under the Trust and Company rules.

For the principal beneficiary, all assessable trust assets up to the concessional asset value limit are exempt from the social security assets test. The concessional asset value limit for a special disability trust is specified in the table below. The limit was initially set at $500,000 on 20 September 2006 and is indexed on 1 July each year to the CPI.

Note: There is no limit on the value of assets that can be held in the special disability trust.

The following table shows the historical concessional asset value limits:

Date Concessional asset value limits ($)
20/09/2006 500,000
01/07/2007 516,500
01/07/2008 532,000
01/07/2009 551,750
01/07/2010 563,250
01/07/2011 578,500
01/07/2012 596,500
01/07/2013 609,500
01/07/2014 626,000
01/07/2015 636,750
01/07/2016 647,500
01/07/2017 657,250
01/07/2018 669,750
01/07/2019 681,750

Act reference: SSAct section 1207X Attributable stakeholder, asset attribution percentage and income attribution percentage, section 1209Y Attribution of assets

Assessment of assets above the concessional asset value limit

Where the trust's assessable assets are above the concessional limit, the amount of assessable assets above asset value limit are to be included in the principal beneficiary's assessable assets.

Assessment of primary residence in special disability trust

The primary residence is an exempt asset and will not be included in the assessable assets of the trust.

Income test assessment

No income of or distributions from the special disability trust are assessable under the social security income test.

Winding-up of the trust - death of principal beneficiary

The special disability trust will terminate and the trust's assets will vest in the residual beneficiaries named in the trust deed, in the proportions specified in the trust deed.

Note: There may be gifting implications under the means test if a donor gifted to the trust within 5 years of the principal beneficiary's death, refer to 4.14.4.30.

Last reviewed: 20 September 2019