Who Can Contribute to a Special Disability Trust?
Special Disability Trusts (SDTs) provide families and communities with a clear and secure way to financially support individuals living with severe disabilities. Although these trusts are designed to receive contributions from a range of sources, several key rules and exceptions govern who can give and how.
Eligible Contributors
Typically, individuals, organisations, and corporations can contribute to an SDT. However, three main restrictions apply.
1. The Settlor
The settlor, or the person who creates the trust, is not allowed to make contributions once the trust is established.
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Why this matters: This rule prevents any conflict of interest and protects the integrity of the trust.
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Reference: Section 1.7 of the Model Trust Deed
2. The Principal Beneficiary and Their Partner
The principal beneficiary (the person with the disability) and their partner generally cannot contribute—unless both of the following conditions apply:
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The funds come from a bequest (e.g. inheritance) or a superannuation death benefit
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They contribute the money within three years of receiving it
Example: If a beneficiary inherits funds from a parent, they can add it to the trust—but only if they do so within the three-year window.
3. Compensation Payments
No person or organisation may contribute compensation money that was awarded to, or on behalf of, the principal beneficiary.
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Legal Reference: Social Security Act (SSAct), section 23(1) and section 1209R
This rule ensures that the trust only receives voluntary gifts—not money intended to settle legal claims or cover damages.
What Kinds of Gifts Are Accepted?
It’s not just about who can contribute—what they contribute also matters. Special Disability Trusts have clear conditions for acceptable gifts.
Contributions Must Be Unconditional
All donations must be made without conditions. This means the donor can’t attach specific terms about how the funds should be used.
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Why this is important: Unconditional gifts give the trust flexibility to meet the beneficiary’s needs as they arise.
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Reference: Section 3 of the Model Trust Deed
Important: The trust cannot accept any gift that limits its discretion or imposes obligations.
There Are No Limits on Frequency
Eligible donors can contribute as often as they like, provided:
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Each gift is unconditional, and
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They follow the rules listed above
Because of this, family members and other supporters can continue contributing over time, creating a sustainable source of support.
What Types of Assets Can Be Donated?
Special Disability Trusts allow a wide variety of assets, as long as they support the beneficiary’s care, housing, or income generation.
Acceptable assets include:
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Cash or savings
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Share portfolios
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Investment properties
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Other income-producing resources
Example: A home given to the trust can be rented out. The rental income can then go toward supported living costs for the beneficiary.
In Summary
Special Disability Trusts offer a structured, secure way to support individuals with severe disabilities. By following the rules around who can contribute, what can be donated, and how supporters must make gifts, contributors can help improve quality of life for their loved ones in meaningful and lasting ways.
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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.