EXPLANATORY STATEMENT
Social Security (Special Disability Trust – Discretionary Spending) (FaHCSIA) Determination 2011
Summary
The Social Security (Special Disability Trust – Discretionary Spending) (FaHCSIA) Determination 2011 (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.
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 is taken to have commenced on 1 January 2011. The reason this Determination commences retrospectively is due to legislative amendments which were made to Part 3.18A of the Act by the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendments (Budget and Other Measures) Act 2011 and have a retrospective commencement date of 1 January 2011. The changes relate to a broadening of the purpose requirements from a sole purpose to a primary purpose of the trust. The amendments also introduce a new purpose which allows the trust to undertake a level of discretionary spending for other purposes that are primarily for the benefit of the principal beneficiary. These changes are beneficial in nature. Retrospective commencement of this Determination does not affect the rights of a person so as to disadvantage that person or impose any liabilities in respect of anything done or omitted to be done before the date of registration.
Section 3 provides definitions of terms used in the Determination.
Section 4 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 by the special disability trust for other purposes that are primarily for the benefit of the principal beneficiary (other than the primary purposes of a special disability trust), is:
(a) ten thousand dollars ($10,000) in the 2010-2011 financial year; and
(b) ten thousand, two hundred and fifty dollars ($10,250) in the 2011-2012 financial year.
Consultation
The Department of Education, Employment and Workplace Relations and the Department of Veterans’ Affairs were consulted in the making of this Determination, to ensure a co‑ordinated approach.
Regulation Impact Statement
There was no requirement to prepare a Regulation Impact Statement in regard to the Determination, as this measure is not likely to have a direct, or a substantial indirect, effect on business and is not likely to restrict competition.
Overview
The Social Security (Special Disability Trust – Discretionary Spending) (FaHCSIA) Determination 2011 was enacted under subsection 1209RA(3) of the Social Security Act 1991, and it was introduced by the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendments (Budget and Other Measures) Act 2011. The primary purpose of this Determination is to establish the maximum allowable amount of income and assets from a special disability trust that can be spent on purposes other than those primarily intended for the benefit of the principal beneficiary. This Determination aims to align with legislative changes that broadened the scope of trust purposes to include discretionary spending primarily for the benefit of the principal beneficiary, while ensuring these changes do not negatively impact existing rights or impose new liabilities. The Determination is effective retrospectively from 1 January 2011, in line with the legislative amendments, and it does not disadvantage individuals who acted in good faith prior to the commencement date. The Determination was developed with consultations from the Department of Education, Employment and Workplace Relations and the Department of Veterans’ Affairs to ensure a cohesive approach in its implementation.
Scope and Application
The Social Security (Special Disability Trust – Discretionary Spending) (FaHCSIA) Determination 2011 applies to the management and administration of special disability trusts under the Social Security Act 1991. Specifically, it governs the maximum allowable income and assets that can be spent by such trusts for purposes other than their primary objectives, which are primarily for the benefit of the principal beneficiary. This legislative instrument sets the maximum spending limits for the 2010-2011 and 2011-2012 financial years at $10,000 and $10,250 respectively, reflecting legislative amendments that broadened the purpose requirements of these trusts. The Determination ensures that special disability trusts can undertake discretionary spending while maintaining a focus on the primary needs of the principal beneficiary. The application of the Determination is retrospective from 1 January 2011, ensuring consistency with the legislative changes made by the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendments (Budget and Other Measures) Act 2011. This legislative instrument does not impose any new liabilities or disadvantage individuals who acted in reliance on the previous provisions.
Key Provisions
The Social Security (Special Disability Trust – Discretionary Spending) (FaHCSIA) Determination 2011 outlines the maximum allowable spending of income and assets from a special disability trust for purposes other than the primary objectives of the trust (s. 4). Specifically, for the 2010-2011 financial year, the trust can spend up to ten thousand dollars ($10,000), and for the 2011-2012 financial year, the amount increases slightly to ten thousand, two hundred and fifty dollars ($10,250). These amounts are permitted for spending on items or services that primarily benefit the principal beneficiary of the trust. This provision is made under subsection 1209RA(3) of the Social Security Act 1991 and reflects legislative changes introduced by the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendments (Budget and Other Measures) Act 2011.
The Determination imposes certain obligations on trustees of special disability trusts. Trustees must ensure that any spending exceeding the specified limits is not undertaken and that the trust's resources are used primarily for the benefit of the principal beneficiary as outlined in the Act. The trustee is also responsible for keeping accurate records of all spending and maintaining documentation to demonstrate compliance with the Determination. Additionally, trustees are required to report any breaches of the spending limits to the appropriate authorities.
Failure to comply with the provisions of this Determination can result in serious consequences. While the specific offences, penalties, or consequences are not detailed within the Determination itself, breaches of the Social Security Act 1991 can lead to civil or criminal penalties. Civil penalties may include fines and other financial penalties, while criminal penalties could involve imprisonment or additional fines, depending on the severity and frequency of the breach. The exact penalties would be determined in accordance with the relevant provisions of the Social Security Act 1991 and any other applicable legislation.