How to boost disability benefits through a trust

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If someone in your family has a severe disability, you want to know they will be provided for when you are no longer able to care for them.

Depending on the circumstances of you and your family member, making them the beneficiary of a Special Disability Trust may be an option to help plan for their future.

The key benefit for the beneficiary is the assets test exemption of up to $596,500 which is indexed each year. This means any Centrelink benefits they currently receive are not affected by funds in their trust up to this amount.

Another benefit is that eligible family members of the beneficiary can gift up to $500,000 (rather than the usual $10,000) to the trust, without affecting their own Centrelink payments.

Contributions or gifts of assets to any value can be made to this type of trust at any time by anyone.

There are conditions on what the trust can be used for, and deciding whether a disability trust is right for you and your family member can be complex. It's important that you consult a financial adviser or solicitor for advice, considering both the short and long term.

Visit the DHS website at humanservices.gov.au/disabilitytrusts for more information.

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