4.14.4.10 Gifting to a Special Disability Trust

Summary

This topic contains information on the following:

  • who can gift to the trust, and
  • types of gifts.

Who can gift to the trust

Once a special disability trust has been established anyone, or an organisation or corporation, can make a gift to a special disability trust.

The exceptions are:

  • the settlor of the special disability trust,
    • Explanation: The person who establishes the trust is called the settlor and they cannot be a donor to the trust (refer to model trust deed).
  • the principal beneficiary (i.e. the person with severe disability) and their partner (if any) unless the contributions by the principal beneficiary (and their partner) are funded by a bequest or superannuation death benefit within 3 years of receipt of the bequest or superannuation death benefit,
    • Example: Joe's dad sets up a special disability trust for him in October 2006. Joe's grandmother died in 2005 and left Joe $10,000 in her will. Joe can gift the $10,000 to his special disability trust provided he does so within 3 years of receiving the $10,000 from his grandmother.
  • no person or organisation can gift compensation money received by or on behalf of the principal beneficiary.

Act reference: SSAct section 23(1) Dictionary, section 1209R Trust property requirements

Types of gifts

All gifts must be unconditional.

Apart from the exceptions, anyone can gift to the special disability trust as many times as they like provided the gifts are unconditional.

Any type of assets can be gifted to the special disability trust provided that they can be utilised to produce income or provide care and accommodation for the principal beneficiary.

Example: A person may wish to gift a share portfolio or an investment property. The income from these sources could then be used by the trust to pay for someone to provide care for the person with severe disability.

Act reference: SSAct section 1209Z(1) Effect of certain transfers to special disability trusts

Policy reference: SS Guide 4.14.4.20 Gifting concession for special disability trusts

Last reviewed: 20 September 2018