Special Disability Trust (SDT) – Australia
A step-by-step guide to establishing and managing an SDT
A Special Disability Trust (SDT) provides a structured way to support a person with a severe disability over the long term, while also accessing valuable government concessions.
To establish an SDT, you must follow several key steps. Below is a clear overview of the process.
1. Confirm Eligibility
First, you need to confirm that the beneficiary meets the eligibility criteria under Services Australia guidelines. Typically, this includes having a severe disability and requiring ongoing care.
Importantly, you should complete this step at the outset, as you cannot establish an SDT unless these requirements are met.
👉 Read more about eligibility requirements in our detailed guide.
2. Choose Trustees
Next, you must appoint trustees who will manage the trust and act in the best interests of the beneficiary.
You can choose family members, trusted individuals, or professional trustees. However, because trustees oversee financial decisions and ensure compliance with legal obligations, selecting the right person is critical.
👉 Learn more about choosing the right trustee.
3. Draft the Trust Deed
Once you have selected trustees, you will need to prepare the trust deed.
This document forms the legal foundation of the SDT and must comply with the model trust deed requirements. It clearly outlines how the trust operates, how funds can be used, and the responsibilities of trustees.
For this reason, we strongly recommend obtaining legal advice at this stage.
👉 Read our guide to drafting a compliant trust deed.
4. Set Up the Trust
After finalising the trust deed, you can formally establish the trust by signing the required legal documents.
At this point, the SDT becomes a recognised legal entity and can begin operating.
👉 See how to properly establish a Special Disability Trust.
5. Apply for Concessions
Following establishment, you should apply to Services Australia for available concessions.
These may include social security means test concessions, which can provide significant financial benefits to both the beneficiary and their family.
Therefore, completing this step ensures the trust can access its full advantages.
👉 Find out what concessions may apply.
6. Open Bank and Investment Accounts
Next, you need to open bank or investment accounts in the name of the trust.
You will use these accounts to receive funds, pay expenses, and manage investments in accordance with SDT rules. In addition, keeping these accounts separate from personal finances is essential for compliance and transparency.
👉 Read more about managing SDT finances.
7. Ongoing Compliance
Once the trust is operational, trustees must meet ongoing compliance requirements.
For example, they must prepare annual financial statements and arrange independent audits. As a result, these processes ensure transparency and help maintain eligibility for concessions.
👉 Learn more about compliance obligations.
8. Ongoing Administration
Finally, trustees must manage the day-to-day administration of the trust.
This includes accounting, lodging tax returns, maintaining accurate records, and monitoring how funds are used. Over time, effective administration supports the long-term sustainability of the trust.
👉 Explore ongoing SDT management responsibilities.
SDT Series Overview
This article forms part of our Special Disability Trust series. Each step above links to a detailed guide to help you better understand the process.
Looking for professional assistance with a Special Disability Trust? Discover how our SDT services can support you.
Disclaimer and Warning The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.