Social Security (Special Disability Trust – Discretionary Spending) Determination 2021

Administered by Department of Social Services

Legislation au F2021L00784 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Social Security Act 1991

Social Security (Special Disability Trust — Discretionary Spending) Determination 2021

Purpose and Background

The purpose of the Social Security (Special Disability Trust — Discretionary Spending) Determination 2021 (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 (CPI) every financial year on 1 July. CPI growth over the year to December 2020 was not sufficient to warrant an increase in the Discretionary Spending Amount for the 2021-2022 financial year.

 

As such, for the financial year of 2021-2022, the Discretionary Spending Limit is determined to be $12,500.

 

Repeal

This instrument repeals the Social Security (Special Disability Trust – Discretionary Spending) Determination 2020 (the 2020 instrument). This instrument is in substantially the same terms as, and will replace, the 2020 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 for 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 it is registered.

Consultation

The indexation of the threshold occurs in July each year as per Social Security 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 that the discretionary spending threshold will remain unchanged.

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 2021.

 

Section 2 provides that this instrument commences on 1 July 2021.

 

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 operates to repeal the 2020 instrument.

 

Section 6 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 purposes that are primarily for the benefit of the principal beneficiary (other than the primary purpose of a special disability trust), is $12,500 for the 2021-2022 financial year.

 

Schedule 1

 

Section 1 repeals the 2020 instrument.

 

Troy Sloan, Group Manager, Pensions, Housing and Homelessness 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 2021

 

 

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. 

Overview of the Determination

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

 

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. Determining an amount means the trustee can undertake discretionary spending that is not directly related to the care and accommodation needs of the person with disability.

 

The total value of the income and / or assets determined under subsection 1209RA(3) of the Act for the 2021-2022 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 recognized in Article 11 of ICESCR and Article 28 of the Convention on the Rights of Persons with Disabilities.

 

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 determining 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.

 

 

Troy Sloan, Group Manager, Pensions, Housing and Homelessness Group, as a delegate of the Secretary of the Department of Social Services

 

Overview

The Social Security (Special Disability Trust — Discretionary Spending) Determination 2021 was enacted to set the maximum allowable amount of income and assets from a special disability trust that can be spent for purposes benefiting the principal beneficiary, but which are not the primary purpose of the trust. This determination was introduced under the authority of the Social Security Act 1991, and it was created by the Parliament to address the need for setting a clear limit on discretionary spending to maintain the trust’s special status. For the 2021-2022 financial year, the discretionary spending limit was set at $12,500, following a review that determined the consumer price index growth did not warrant an increase from the previous year. This legislative instrument replaces the 2020 determination and is designed to ensure that discretionary spending does not undermine the primary objectives of the trust, thereby promoting the right to social security and an adequate standard of living for beneficiaries.

Scope and Application

The Social Security (Special Disability Trust — Discretionary Spending) Determination 2021 applies to trustees of special disability trusts who are permitted to spend a portion of the trust's income or assets for purposes primarily for the benefit of the principal beneficiary, other than the primary purpose of the trust, as defined under the Social Security Act 1991. This Determination sets the maximum allowable amount of discretionary spending for the financial year 2021-2022 at $12,500, which has been indexed based on the consumer price index (CPI) and is applicable nationally within Australia. The Act under which this Determination is made allows for the repeal and replacement of previous Determinations, such as the 2020 instrument, ensuring the rules remain up-to-date. The instrument is a legislative instrument and can be disallowed, commencing the day after its registration. The purpose is to ensure that special disability trusts retain their status while allowing for some flexibility in the use of trust funds for the benefit of the principal beneficiary.

Key Provisions

The Social Security (Special Disability Trust — Discretionary Spending) Determination 2021 (section 6) sets out that the maximum value of the income and/or assets of a special disability trust that can be spent for purposes primarily for the benefit of the principal beneficiary, but not for the primary purposes of the trust, is $12,500 for the financial year 2021-2022. This amount is intended to allow for discretionary spending that is not directly related to the care and accommodation needs of the person with disability, while preserving the special disability trust status under section 1209L of the Social Security Act 1991. The Act imposes several obligations on trustees of special disability trusts. Trustees must ensure that the total value of the trust’s income and assets applied for purposes primarily for the benefit of the principal beneficiary, but not for the primary purposes of the trust, does not exceed the Discretionary Spending Limit. This requirement is crucial for maintaining the trust's eligibility for special disability status and benefits. Trustees must also keep accurate records and reports on the use of trust funds, and adhere to any additional guidelines or conditions specified by the Social Security Act or related regulations. Failure to comply with the provisions of this determination may result in the trust losing its special disability status, which could have significant implications for the beneficiary's care and financial support. Additionally, trustees who mismanage or improperly use trust funds may face legal consequences, including potential civil or criminal penalties. The specific consequences will depend on the nature and extent of the breach, but they could include fines, compensation orders, or even criminal charges in cases of fraud or misconduct. The Act also includes provisions for the repeal of previous determinations, such as the Social Security (Special Disability Trust — Discretionary Spending) Determination 2020, which is superseded by this 2021 instrument. The 2021 determination is made under subsection 1209RA(3) of the Social Security Act 1991, and it explicitly states that the previous determination is repealed as of the commencement of this new instrument. This ensures that there is a clear and updated framework governing the discretionary spending of special disability trust funds.

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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.