Special Disability Trust

A Special Disability Trust (SDT) is a specific type of trust, recognised under Commonwealth social-security law, set up to meet the reasonable care and accommodation needs of a single beneficiary with a severe disability. It offers valuable concessions: gifting and means-test exemptions for family contributors, and an assets-test concession plus income exemption for the beneficiary, so a disabled person can be provided for without losing their pension. An SDT can be created during your lifetime or as a testamentary trust in your Will.

Strict eligibility rules apply — the beneficiary must meet Centrelink's severe-disability definition, and the trust must use the model deed and meet purpose limits. Example: David's Will establishes a Special Disability Trust so his son's accommodation and medical care are funded for life without affecting his Disability Support Pension. Because the rules are detailed and federal, an SDT should always be set up with professional advice.