Social Security (Special Disability Trust – Discretionary Spending) Determination 2020

Administered by Department of Social Services

Legislation au F2020L00896 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Social Security Act 1991

Social Security (Special Disability Trust — Discretionary Spending) Determination 2020

Purpose and Background

The purpose of the Social Security (Special Disability Trust — Discretionary Spending) Determination 2020 (this instrument) is to set out the maximum amount of a special disability trust’s income and / or assets that can be spent for purposes that are primarily for the benefit of the principal beneficiary, but are purposes other than the primary purpose of the special disability trust (the Discretionary Spending Limit) described in subsection 1209N(1) of the Social Security Act 1991 (the Act).

 

The Discretionary Spending Limit was initially set at $10,000 on 1 January 2011. Since then, the Discretionary Spending Limit has been indexed according to the consumer price index every financial year on 1 July.

 

For the financial year of 2020-2021, the Discretionary Spending Limit is determined to be $12,500.

 

Repeal

This instrument repeals the Social Security (Special Disability Trust – Discretionary Spending) Determination 2019 (the 2019 SDTDS instrument). Aside from indexing the Discretionary Spending Limit to $12,500, this instrument is in substantially the same terms as, and will replace, the 2019 SDTDS instrument from the day this instrument commences (discussed below).

Authority

This instrument is made under paragraph 1209RA(3) of the Act. If a Determination is made under subsection 1209RA(3) of the Act, under subsection 1209RA(1), where a special disability trust has one or more purposes, other than its primary purpose, that are primarily to the benefit of the intended beneficiary, the total value of the income and assets of the trust applied for those other purposes in a financial year must not exceed the value specified in the determination for that year.

 

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power is construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

This instrument is a legislative instrument for the purposes of the Legislation Act 2003. This instrument is disallowable.

Commencement

This instrument commences on the day after this instrument is registered.

Consultation

The indexation of the threshold is government policy and occurs in July each year as per Guide page 4.14.3.35 Special disability trusts - discretionary spending.  Services Australia was consulted during the preparation of this instrument, in relation to informing trustees with a Special Disability Trust of the change in the discretionary spending threshold.

Regulation Impact Statement

The instrument does not require a Regulatory Impact Statement.  The instrument is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact (OBPR ID: 25212).

Explanation of the provisions

Section 1 provides that the name of this instrument is the Social Security (Special Disability Trust — Discretionary Spending) Determination 2020.

 

Section 2 provides that this instrument commences on the day after this instrument is registered.

 

Section 3 provides that the authority for making this instrument is subsection 1209RA(3) of the Act.

 

Section 4 provides definitions of terms used in this instrument.

 

Act is defined to mean the Social Security Act 1991.

 

special disability trust is defined to have the same meaning given by section 1209L of the Act.

 

Section 5 and Section 6 operates to repeal the SDTDS instrument.

 

Section 7 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 $12,500 in the 2020-2021 financial year.

 

Schedule 1

 

Section 1 repeals the SDTDS instrument.

 

Andrew Whitecross, Group Manager, Pensions and Families Group, as a delegate of the Secretary of the Department of Social Services

 

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 2020

 

 

This instrument 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 (the Act). 

Overview of the Determination

This instrument is made under subsection 1209RA(3) of the Social Security Act 1991.

 

The purpose of this instrument is to set out the maximum amount of the income and / or assets of a special disability trust that may 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).

 

This instrument is designed to allow a certain amount of trust income and / or 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 section 1209L of the Act. Increasing the amount will mean the trustee can undertake a higher level of discretionary spending that is not directly related to the care and accommodation needs of the person with a disability.

 

The total value of the income and / or assets determined under subsection 1209RA(3) of the Act for the 2020-2021 financial year is $12,500.

Human rights implications

This instrument 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).

 

This instrument 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 the receipt of 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

This instrument is compatible with human rights because it promotes the right to social security and the right to an adequate standard of living.

 

 

 

Andrew Whitecross, Group Manager, Pensions and Families Group, as a delegate of the Secretary of the Department of Social Services

 

Overview

The Social Security (Special Disability Trust — Discretionary Spending) Determination 2020 is a legislative instrument enacted to address the need for setting a limit on the amount of discretionary spending from special disability trusts. This instrument, made under the Social Security Act 1991, establishes the maximum amount of a special disability trust’s income and/or assets that can be spent for purposes primarily benefiting the principal beneficiary, but not directly related to the trust’s primary purpose. The determination responds to the requirement in subsection 1209RA(3) of the Act that mandates a limit on discretionary spending to maintain the special disability trust status. For the financial year 2020-2021, the discretionary spending limit has been set at $12,500, indexed from the previous $10,000 limit. This instrument also repeals the previous determination from 2019, replacing it with updated limits while maintaining the same terms otherwise. The objective of this instrument is to ensure that special disability trusts can support beneficiaries' needs beyond their primary care and accommodation needs, thereby promoting social security and an adequate standard of living as recognised in international human rights instruments.

Scope and Application

The Social Security (Special Disability Trust — Discretionary Spending) Determination 2020 applies to trustees of special disability trusts under the Social Security Act 1991, specifically setting out the maximum amount of a special disability trust’s income and/or assets that can be spent for purposes primarily for the benefit of the principal beneficiary, but not for the primary purposes of the trust. This legislation sets the discretionary spending limit at $12,500 for the 2020-2021 financial year, replacing the previous determination and reflecting indexing based on the consumer price index. The Act applies nationally across Australia, with the Determination coming into effect from the day after it is registered. The instrument is made under the authority of subsection 1209RA(3) of the Act and is a legislative instrument under the Legislation Act 2003, subject to disallowance. This Determination does not require a Regulatory Impact Statement, as it is not considered regulatory in nature and is intended to have minimal compliance costs or competition impact. The Determination is compatible with human rights, particularly the right to social security and an adequate standard of living, as recognised in international instruments.

Key Provisions

The main operative sections of the Social Security (Special Disability Trust — Discretionary Spending) Determination 2020 are section 7, which specifies the maximum amount of discretionary spending permitted for special disability trusts, and section 1, which names the instrument. 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 purpose of the trust, which is to meet the reasonable care and accommodation needs of the beneficiary. For the 2020-2021 financial year, the maximum discretionary spending limit is set at $12,500 (section 7). This limit allows trustees to use a portion of the trust’s income and assets for the benefit of the principal beneficiary for purposes other than the primary purposes of the trust, while ensuring the trust maintains its ‘special disability trust’ status. The obligations imposed on trustees by this determination include ensuring that any discretionary spending does not exceed the specified limit for the financial year, which is $12,500 (section 7). Trustees must also ensure that the primary purpose of the trust—to meet the reasonable care and accommodation needs of the beneficiary—is not compromised by the discretionary spending. This includes maintaining appropriate records and documentation to demonstrate compliance with the discretionary spending limit and ensuring that any spending is for purposes that are primarily for the benefit of the principal beneficiary. The determination also outlines potential consequences for breaches. If a trustee exceeds the discretionary spending limit, the trust may lose its status as a ‘special disability trust’ under the Social Security Act 1991, which could result in the beneficiary losing certain social security entitlements. The determination itself does not specify penalties for breaches but refers to the Social Security Act 1991, which may impose civil or criminal penalties for non-compliance with its provisions. It is essential for trustees to adhere to the discretionary spending limit to avoid any negative impacts on the trust and the beneficiary’s entitlements.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.