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This topic contains information on the following:
Note: These waivers may apply where the trust or trustee cannot meet one or more specific legislative requirement for a special disability trust.
For a trust to be a special disability trust it must meet the legislated requirements. However, in certain circumstances a waiver can be given if it is considered appropriate.
Explanation: There may be some circumstances where the trustee is unable to comply with the requirements for a short period of time. Rather than the trust ceasing to be a special disability trust and losing any associated concessions, it may be more appropriate to waiver the requirement until it can be met.
For all trusts, regardless of when they were established, a waiver notice CANNOT be given if any of the following provisions of a special disability trust are not met:
In addition to the above, a waiver CANNOT be given for the trust deed requirements (section 1209P) for all trusts established after 1 January 2011.
Act reference: SSAct section 1209M Beneficiary requirements, section 1209Q Trustee requirements, section 1209R Trust property requirements, section 1209S(2) Reporting requirements, section 1209T Audit requirements, section 1209P Trust deed requirements, section 1209U Waiver of contravention of this Division
Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011
Social Security (Special Disability Trust) (DEEWR) Guidelines 2011
A waiver notice can only be given to the trustee in certain circumstances and only for a limited time.
While the financial statements must be prepared and provided to Centrelink to protect the interests of the principal beneficiary, if there is a delay in providing the financial statements (section 1209S(1)) of the special disability trust and the delay is not due to the actions of the trustee, a waiver notice can be given for a period up to 3 months from 31 March in the relevant year. This can be extended if the circumstances warrant it for an additional 3 month period, up to a maximum of 12 months.
Example: A trustee has provided all the relevant trust papers to the accountant before 31 March for the preparation of the special disability trust's financial statements. The accountant is unable to complete the financial statements by 31 March and indicates that they will be ready by 15 June. A waiver notice is issued with an end date of 15 June. However, a fire occurs and the accountant loses all their records causing a further delay in the preparation of the trust's financial statements. An additional waiver notice may be issued for a further period of 3 months.
In certain circumstances a waiver notice may be issued if the special disability trust purpose requirements (section 1209N) are not met. Consideration must be given to the nature of the breach and the number of times a similar event has occurred.
A waiver notice can only be given if the non-compliance relates to total expenditure in a financial year of no more than $5,000.
A waiver notice CANNOT be given where the purpose requirements are not met because of fraudulent behaviour.
Example: In a financial year, a trustee spends $4,000 (in addition to the $10,000 discretionary monies allowed from 1 January 2011, i.e. a total of $14,000 for the 2010-11 financial year, or the $10,250 discretionary monies allowed from 1 July 2011, i.e. total of $14,250 for the 2011-12 financial year) of the special disability trust's income on holiday expenses for the principal beneficiary and their carer. This is the only time that the trustee has done this and it was done as a result of the trustee not fully understanding the purpose requirements. A waiver notice may be given. However, if the trustee has spent the special disability trust's income in this manner for the last 2 years, a waiver notice would not be appropriate.
Act reference: SSAct section 1209S(1) Reporting requirements, section 1209N Trust purpose requirements, section 1209U Waiver of contravention of this Division
Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011
Social Security (Special Disability Trust) (DEEWR) Guidelines 2011
Policy reference: SS Guide 4.14.3.35 Special Disability Trust - Discretionary Spending
If a trust was established before 1 January 2011 which was not originally created as a special disability trust, it may not be possible to alter the trust deed to comply with the clauses of the amended model trust deed that comes into effect from 1 January 2011.
Where a trust deed cannot be altered and the trustee provides a statutory declaration that they will comply with the special disability trust requirements. That is:
A waiver can be given in the above circumstances. However, the waiver can only apply for the period that the trustee continuously complies with the agreed conditions in the statutory declaration. The waiver will be reviewed every 12 months.
Act reference: SSAct section 1209U Waiver of contravention of this Division, Part 3.18A Division 1 Special disability trusts
Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011
Social Security (Special Disability Trust) (DEEWR) Guidelines 2011
The waiver notice must be in writing and contain:
Act reference: SSAct section 1209U Waiver of contravention of this Division
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Last reviewed: 1 July 2011
