A new type of trust aimed at helping the parents of disabled children provide for their care and accommodation hasn’t proved as useful as hoped and families are exploring other avenues, including early access to the superannuation system.
The special disability trust structure introduced by the Federal Government in September 2006 quarantines money set aside for care and accommodation from rules affecting age and disability support pension entitlements.
Assets held in such trusts are exempt from the social security assets test, up to a limit of $516,500 (adjusted annually for inflation) on top of the usual assets test thresholds. In addition, family members eligible to contribute to such a trust are exempt from gifting rules that affect pension entitlements.
Generally speaking, pensioners can’t give away more than $10,000 a year without affecting their entitlements.
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