Special disability trusts
Special disability trusts in Victoria.
If you are providing for a family member with a severe disability, a special disability trust can protect both their care and their pension. CMK Legal in Richmond builds special disability trusts into your will, set up to meet the strict Commonwealth rules that make them work, so the structure is there if it is ever needed.
Solicitor-drafted
Written to the Social Security rules by a Victorian lawyer, not a template.
Pension protected
Structured so the beneficiary's payments and the family's gifting concessions are not lost.
Built into your will
It only comes into effect if it is genuinely needed at the time.
Fixed fee
Quoted in writing before we start.
What a special disability trust is.
A special disability trust is a specific structure recognised under the Social Security Act 1991 and the Social Security (Special Disability Trust) Guidelines 2021. It exists to provide for the long-term care and accommodation of a person with a severe disability, without that provision costing them their pension, or costing the family the concessions that would otherwise be lost.
It is not an ordinary family trust with a different name. The beneficiary has to meet the legal definition of severe disability, and only one such trust can be held for them. Whether a person qualifies is the first question, and it is not always obvious, which is why it is worth checking before anything is drafted.
Why families use one.
The concessions are the point. Eligible family members who are pensioners can contribute up to a set gifting amount without it counting against their own pension, and the trust can hold assets up to an indexed cap before the beneficiary's payments are affected. For a family trying to secure a vulnerable person's future, that is the difference between providing properly and accidentally cutting the support they rely on.
The figures matter and they move. The gifting concession and the asset cap are set by the Commonwealth, are treated differently from each other, and a contribution made the wrong way, or before the trust formally exists, cannot always be undone. This is not a structure to improvise.
In return for the concessions, the rules are strict. The funds can generally only be spent on the beneficiary's reasonable care and accommodation needs, and the trust is subject to annual reporting and can be audited. We set it up so it does what it is meant to and stays compliant.
How it fits your will.
A special disability trust can be written into your will so it only comes into existence on your death, and only if it is still the right tool then. That keeps your options open and avoids running a trust before it is needed.
Because it changes how the rest of your estate is divided, it has to be planned alongside your other beneficiaries and your powers of attorney, not bolted on afterwards. If someone in your family may qualify, it is worth raising early.
Why families use one.
Protects the pension
Structured so the money you leave for care does not reduce the payments the beneficiary depends on.
Preserves gifting concessions
Eligible pensioner family members can contribute without it counting against their own pension.
Provides for care and accommodation
Funds the reasonable care and accommodation needs of a person with a severe disability, for the long term.
Kept compliant
Set up to meet the reporting and audit requirements, so the concessions are not put at risk.
Talk to us if.
- You are providing for a child or relative with a severe disability
- You want to leave money for their care without affecting their pension
- A family member wants to gift into a trust for them
- You have been told a special disability trust might suit and want it checked
- You are reviewing a will that already sets one up
If someone in your family may qualify, an early conversation is usually enough for us to tell you whether a special disability trust is worth setting up.
How CMK Legal sets up a special disability trust.
- 01
Check eligibility
We confirm whether the intended beneficiary meets the definition of severe disability before anything is drafted.
- 02
Map the estate and the gifting
We look at who wants to contribute, the assets involved and how they interact with the pension and the cap.
- 03
Draft it into your will
The trust is written into your will so it only comes into effect if it is needed.
- 04
Settle trustee and control
We settle who acts as trustee and how the funds are managed for the beneficiary's benefit.
- 05
Review as the rules change
The figures and rules are indexed and updated, so we review the structure whenever your will is reviewed.
Fixed-fee estate planning.
A special disability trust is drafted as part of your will and quoted as a fixed fee in writing before we start. Because eligibility and the concessions have to be checked properly, we scope it after an initial conversation, so the fee reflects your situation rather than a guess.
FAQs
Special disability trust FAQs.
Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.
Who qualifies as the beneficiary of a special disability trust?
Can family gift money in without losing their pension?
What can the trust's money be spent on?
Related services.
Testamentary trusts
Asset protection and tax flexibility for beneficiaries, built into the structure of your will.
Learn moreWills
A solicitor-drafted will built around your family, your property and your business interests.
Learn morePowers of attorney
Decide who manages your finances, personal matters and medical care while you are alive.
Learn moreProvide for their future properly.
Speak with a CMK Legal estate planning solicitor in Richmond about whether a special disability trust suits your family.