How to Maintain Compliance in a Special Disability Trust
In Special Disability Trusts, compliance protects the financial security and well-being of individuals with disabilities. To qualify as a complying trust, trustees must meet and maintain several key conditions. Here’s what guardians, trustees, and beneficiaries need to know.
Key Requirements for a Complying Special Disability Trust
1. Trust Deed Compliance
The trust must use a deed that meets all mandatory conditions in the Model Trust Deed.
If any clause doesn’t comply, trustees can apply for a waiver.
Reviewing the deed regularly helps ensure ongoing compliance.
2. Legislative Requirements
Trustees must follow all laws that apply to Special Disability Trusts.
Since laws can change, trustees should stay updated with any new regulations.
3. Annual Financial Statements
Trustees must prepare yearly financial statements.
An accountant registered with CPA Australia, Chartered Accountants Australia and New Zealand, or the Institute of Public Accountants must certify these statements.
They must also follow Australian Accounting Standards.
4. Accessible Documentation
Centrelink and the Department of Veterans’ Affairs (DVA) may request trust documents, including financial statements and tax returns.
Trustees should respond quickly and keep records organized to maintain transparency.
5. Independent Audit Rights
The trust deed must allow the principal beneficiary or donor to request an independent audit if they question trust management.
Centrelink or DVA can also order an audit at the trust’s expense if they suspect asset misuse.
What Happens if the Trust Becomes Non-Compliant?
If the trust breaks any key rules, authorities will reclassify it.
The trust then follows regular private trust and company rules starting from the date of non-compliance.
This reclassification can affect the beneficiary’s Centrelink payments and tax situation.
Therefore, trustees must act quickly if compliance issues arise.
Handling Non-Compliance and Seeking Waivers
The Secretary can grant temporary waivers for certain breaches.
This option lets trustees fix issues without losing compliance immediately.
However, trustees must act promptly and communicate openly with authorities.
Final Thoughts
Compliance isn’t just a legal box to tick—it safeguards the beneficiary’s future.
By staying proactive, maintaining clear records, and addressing problems quickly, trustees help ensure the trust fulfills its vital role.
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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.