A Guide to Special Disability Trusts

A Special Disability Trust is a legal trust structure that allows families to plan for the long-term care and accommodation needs of someone with a disability, usually a child. These trusts also apply to adult children with a disability who will likely need specific assistance for the rest of their life. It is an excellent way for families to have peace of mind that their child’s care needs are understood and legally provided for, should something happen to them.

This post will go over all the aspects of a Special Disability Trust, and why they are so important.

Principal Beneficiary

A principal beneficiary is the disabled person for whom the trust is made, and who receives financial benefits from the trust. In order to be a principal beneficiary, a person must meet one or more of the following eligibility criteria.

• Has a disability that makes them unable to work more than seven hours a week in the open labour market
• Has a disability that qualifies them for a Disability Support Pension, a Department of Veterans’ Affairs (DVA) Invalidity Service Pension or DVA Invalidity Income Support Supplement
• Has a disability that would, if the person had a sole carer, qualify the carer for a Carer Payment or Carer Allowance
• Is living in an institution, hostel or group home where care is provided for people with disabilities and funding is provided under an agreement between the Commonwealth, states and territories.

Trust Structure

An SDT works in the same way as other trusts, in that one or more trustees holds and manages assets on behalf of the principal beneficiary, in this case being the disabled person who cannot manage the assets themselves. As of July 2025, up to $832,750 (indexed annually) can be held in the trust exempt from the beneficiary’s social security assets test (i.e. not counted towards their Centrelink assets test assessment). Those assets must be used for the beneficiary’s reasonable care needs. Examples of these reasonable care needs include professional care services and mobility and communication devices. An SDT also requires annual auditing of the use of these funds, to ensure that they are being used for their intended purposes.

Discretionary Spending

SDTs can also allow up to $14,750 (indexed annually) per year for discretionary costs. These are costs that are not directly related to disability care, but still need to be paid to care for the disabled person. These costs include food, accommodation, clothing, recreational activities and more.

Special Disability Trusts should be prepared with legal advice alongside other estate planning documents. If you are in need of an SDT for a family member, please do not hesitate to contact me. I am here to help.

DISCLAIMER: This article is for informational purposes only and does not constitute legal advice.