EXPLANATORY STATEMENT
Social Security (Special Disability Trust — Discretionary Spending) Determination 2015
Summary
The Social Security (Special Disability Trust — Discretionary Spending) Determination 2015 (the Determination) is made under subsection 1209RA(3) of the Social Security Act 1991 (the Act). The purpose of the Determination is to set out the maximum amount of a special disability trust’s income and assets that can be spent for purposes that are primarily for the benefit of the principal beneficiary that are purposes other than the primary purpose of the special disability trust described in subsection 1209N(1) of the Act.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Section 1 sets out the name of the Determination.
Section 2 provides that the Determination commences on 1 July 2015. The determination will have retrospective effect to allow principal beneficiaries the benefit of the increased discretionary amount from 1 July 2015.
Section 3 provides that the Social Security (Special Disability Trust ‑ Discretionary Spending) Determination 2014 is revoked on the commencement of the Determination.
Section 4 provides definitions of terms used in the Determination.
Section 5 provides that, for the purposes of subsection 1209RA(3) of the Act, the maximum value of the trust’s income and assets that can be spent for other purposes that are primarily for the benefit of the principal beneficiary (other than the primary purposes of a special disability trust), is eleven thousand, two hundred and fifty dollars ($11,250) in the 2015-2016 financial year.
Consultation
The Department of Veterans’ Affairs was consulted by electronic communication in the making of this Determination, to ensure a coordinated approach.
Regulation Impact Statement
A Regulation Impact Statement is not required for this Determination because this Determination is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Special Disability Trust — Discretionary Spending) Determination 2015
The Social Security (Special Disability Trust – Discretionary Spending) Determination 2015 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Determination
The Determination is made under subsection 1209RA(3) of the Social Security Act 1991.
The purpose of the Determination is to set out the maximum amount of the income and assets of a special disability trust that can be spent for purposes that are primarily for the benefit of the principal beneficiary (other than the primary purposes of a special disability trust which is to meet reasonable care and accommodation needs of the beneficiary).
The Determination is designed to allow a certain amount of trust income and assets to be used for the benefit of the principal beneficiary for purposes other than the primary purposes of the trust, while maintaining the ‘special disability trust’ status in accordance with s 1209L. Increasing the amount will mean that more of the income of a person with a disability will not be considered ordinary income for social security assessment purposes due to the maintenance of ‘special disability trust’ status.
The maximum amount is eleven thousand, two hundred and fifty dollars ($11,250) in the 2015-2016 financial year.
Human rights implications
The Determination engages the following human rights:
- the right to social security as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and
- the right to an adequate standard of living as recognised in Article 11 of ICESCR and Article 28 of the Convention on the Rights of Persons with Disabilities (CPRD).
The Determination will promote the right to social security and the right to an adequate standard of living for those people whose social security entitlements are affected by receiving income from a special disability trust. The rights will be promoted by increasing the amount of discretionary use of special disability trust funds before the trust loses its status as a ‘special disability trust’.
Conclusion
The Determination is compatible with human rights because it promotes the right to social security and the right to an adequate standard of living.
Finn Pratt, Secretary, Department of Social Services
Overview
The Social Security (Special Disability Trust — Discretionary Spending) Determination 2015 was enacted to address the issue of setting a clear limit on discretionary spending from special disability trusts, which are designed to meet the care and accommodation needs of individuals with disabilities, without affecting their status under the Social Security Act 1991. This Determination was made under subsection 1209RA(3) of the Social Security Act 1991 by the Department of Social Services, and it sets the maximum amount that can be spent on purposes primarily benefiting the principal beneficiary other than the primary purposes of the trust for the 2015-2016 financial year, which is $11,250. The policy objective is to ensure that individuals with disabilities can benefit from discretionary spending from their special disability trusts without losing their status, thereby maintaining their eligibility for social security benefits. The Determination was designed to promote the right to social security and an adequate standard of living, aligning with international human rights instruments.
Scope and Application
The Social Security (Special Disability Trust — Discretionary Spending) Determination 2015 applies to the management and use of income and assets within special disability trusts, which are established under the Social Security Act 1991 for the benefit of individuals with a disability. The Determination specifies the maximum amount that can be spent from these trusts for purposes other than the primary purpose of meeting the reasonable care and accommodation needs of the beneficiary. It applies to these trusts across Australia, given the federal nature of the Social Security Act, which is a Commonwealth Act. The Determination came into effect on 1 July 2015, and it superseded the previous Social Security (Special Disability Trust — Discretionary Spending) Determination 2014. The Determination does not apply to any exclusions, exemptions, or thresholds beyond those specified within the Act itself. The application and interpretation of the Determination may be further refined or extended through subordinate instruments, such as regulations or other legislative instruments, although this particular Determination does not provide for such extensions. The Determination ensures that the use of funds for discretionary purposes does not jeopardise the special status of the trust, thereby protecting the social security entitlements of the principal beneficiary.
Key Provisions
The Social Security (Special Disability Trust — Discretionary Spending) Determination 2015 (the Determination) sets out the maximum value of a special disability trust’s income and assets that can be spent for purposes other than the primary purposes of the trust, which is to meet the reasonable care and accommodation needs of the beneficiary (subsection 1209N(1) of the Social Security Act 1991 (the Act)). Specifically, Section 5 of the Determination states that the maximum amount allowable in the 2015-2016 financial year is eleven thousand, two hundred and fifty dollars ($11,250). This amount is set to ensure that the trust retains its special status under the Act, which in turn helps in determining the beneficiary's eligibility for social security benefits.
The Determination imposes certain obligations on trustees of special disability trusts. Trustees must ensure that any spending over the prescribed amount does not cause the trust to lose its special status, which could impact the beneficiary’s social security entitlements adversely. Trustees are also required to maintain proper records and documentation of all discretionary spending to comply with the provisions of the Determination. Failure to adhere to these obligations could lead to the trust losing its special status and the beneficiary’s social security assessment being adversely affected.
There are no explicit offences, penalties, or consequences detailed in the Determination itself, as it is a legislative instrument that primarily sets out permissible limits rather than prescribing punitive measures. However, any misuse or mismanagement of the trust funds that leads to the trust losing its special status could indirectly result in the beneficiary being ineligible for certain social security benefits, which could have significant financial implications. Additionally, trustees who fail to comply with the requirements of the Determination may face scrutiny and potential legal consequences if it is determined that their actions have led to the trust losing its special status.
In conclusion, the Determination provides a clear framework for the discretionary spending of special disability trust funds, ensuring that beneficiaries can benefit from these funds without jeopardizing their social security entitlements. Trustees must carefully manage and document their spending to stay within the prescribed limits and maintain the trust's special status. While the Determination does not specify penalties, adherence to its provisions is crucial to avoid any adverse impact on the beneficiary's social security benefits.