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Social Security (Special Disability Trust - Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006

Social Security (Special Disability Trust - Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006

Administered by Department of Education, Employment and Workplace Relations

Legislation au F2006L03161 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006

Summary

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006 (the Determination) is made under subsections 1209P(2), 1209S(4) and 1209T(7) of the Social Security Act 1991 (the Act). The Determination has three purposes. Firstly, it allows the Secretary to the Department of Education, Science and Training to specify certain matters in regard to the form and provisions to be used in a trust deed for it to qualify as a Special Disability Trust. Secondly, it sets out certain matters in regard to the annual financial reports of a trust and, thirdly, it sets out certain matters in regard to the auditing of Special Disability Trusts.

The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Part 1—Preliminary

Part 1 sets out the preliminary information about the Determination, namely, the name of the determination (section 1.1), commencement (section 1.2) and definitions (section 1.3).

Part 2 – Trust Deed Requirements

Section 2.1 provides that for the purposes of paragraph 1209P(2)(a), a trust that wishes to qualify as a Special Disability Trust must be in the form of the “model trust deed”. This is a term defined in section 1.3 and refers to a booklet published by the Department of Families, Communities and Indigenous Affairs, which sets out the preferred model trust deed for a Special Disability Trust.

Section 2.2 provides a list of clauses from the “model trust deed” that are mandatory to be included in any trust deed that wishes to qualify as a Special Disability Trust (paragraph 1209P(2)(b)). These clauses must be used in the form set out in the “model trust deed” (paragraph 1209P(2)(c)).

Section 2.3 provides that, for the purposes of paragraph 1209P(2)(d) of the Act, a trust deed of a Special Disability Trust cannot contain any clause that is inconsistent, or overrides, the operation of any of the clauses listed in the table in subsection 2.2(1).

Part 3 – Reporting requirements

Section 3.1 provides that, for the purposes of paragraph 1209S(2)(a) of the Act, the financial statements of a Special Disability Trust must be prepared by a person who is a member of CPA Australia, the Institute of Chartered Accountants in Australia or the National Institute of Accountants, or is an employee of a trustee corporation and who is engaged to work as an accountant or financial planner. The person preparing the statements is not to be an immediate family member of the principal or residuary beneficiary or a trustee of the trust.

Section 3.2 provides that, for subsection 1209S(3), the financial statements about the trust must include, for the relevant financial year, a profit and loss statement, a balance sheet (with applicable notes) and, if necessary, a depreciation schedule for each class of assets held by the trust. The financial statements must comply with relevant Australian Accounting Standards and give a true and fair view of the trust’s position as at 30 June in the relevant year. The financial statements must include a statement that all amounts paid out of the trust (other than those paid for reasonable administration expenses and taxation) were to meet the reasonable care and accommodation needs of the principal beneficiary (or for purposes ancillary to meeting those needs) and no amount was paid out for purposes other than those noted above or for services provided to the principal beneficiary by an immediate family member.

Section 3.3 provides that when the Secretary is provided with the trust’s financial statements each year, a certified copy of the trust’s income tax return, in relation to this same period, must also be provided.

Section 3.4 provides that when the Secretary is provided with the trust’s financial statements each year, the trustees of the trust must also provide a Statutory Declaration to the effect that all the information that has been presented to the Secretary, in accordance with section 1209S of the Act, is true and correct in all material particulars.

Part 4 – Auditing requirements

Section 4.1 provides that for the purposes of paragraph 1209T(2)(b), where a person has requested an audit under subsection 1209T(3), the period of the audit will be the period specified by the person requesting the audit, being a period of 1 to 5 financial years during the last 5 completed financial years prior the audit request.

Section 4.2 provides that, for the purposes of paragraph 1209T(5)(a) of the Act, the auditing of a Special Disability Trust must be conducted by a person who is a member of CPA Australia, the Institute of Chartered Accountants in Australia of the National Institute of Accountants. The person conducting the audit cannot be an immediate family member of the principal or residuary beneficiary or a trustee of the trust. The auditor also cannot be any person who prepared, or is preparing, the financial statements of the trust for the financial year to be audited.

Section 4.3 provides that, for subsection 1209T(6), the audit must comply with relevant Australian Accounting Standards and provide a statement that the trust’s financial statement give a true and fair view of the trust’s position and performance as at 30 June in the relevant year. The audit must also include a statement as to whether the trust has complied with specified provisions of the trust deed (or all of the provisions of the trust deed), if the person requesting the audit has asked for this matter to be audited.

Consultation

The Department of Families, Community Services and Indigenous Affairs and the Department of Employment and Workplace Relations were consulted in the making of this Determination, to ensure a co‑ordinated approach in respect of payments under the Act for which they have responsibility. The Department of Human Services was also consulted in relation to service delivery issues.

Regulation Impact Statement

There was no requirement to prepare a Regulation Impact Statement in regard to the Guidelines, as this measure is not likely to have a direct, or a substantial indirect, effect on business and is not likely to restrict competition.

Commencement

The Determination commenced on 20 September 2006, but was registered on 21 September 2006. The Determination has a beneficial effect and therefore rights and liabilities of persons are not disadvantaged for the purposes of subsection 12(2) of the Legislative Instruments Act 2003.

Overview

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006 was enacted to provide clarity and consistency in the administration of Special Disability Trusts under the Social Security Act 1991. This legislation was introduced to address the need for standardised trust deed requirements, as well as clear guidelines for financial reporting and auditing of these trusts, ensuring that they operate in a manner that is transparent and accountable. The Determination was made under the authority of the Parliament of Australia, with the objective of enhancing the oversight and management of funds intended for the care and accommodation of individuals with disabilities. The determination specifies the form and provisions that a trust deed must include to qualify as a Special Disability Trust, outlines the requirements for the preparation and submission of annual financial reports, and sets the criteria for the auditing of these trusts. The Determination establishes that Special Disability Trusts must use a "model trust deed" published by the Department of Families, Communities and Indigenous Affairs, ensuring consistency in the legal framework governing these trusts. It mandates that financial reports be prepared by qualified professionals and submitted along with an income tax return and a statutory declaration affirming the accuracy of the information provided. Furthermore, the Determination sets out the scope and standards for audits of Special Disability Trusts, ensuring that they are conducted by independent and qualified auditors who are not related to the trust or its beneficiaries. This comprehensive approach aims to safeguard the interests of beneficiaries and maintain public confidence in the administration of these trusts.

Scope and Application

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006 applies to entities that seek to qualify as a Special Disability Trust under the Social Security Act 1991. It outlines the requirements for the form and provisions of trust deeds, the preparation and submission of annual financial reports, and the auditing processes for such trusts. The determination is applicable nationally under the Commonwealth jurisdiction. The trust deed requirements necessitate that the trust adhere to a "model trust deed" published by the Department of Families, Communities and Indigenous Affairs, incorporating specified mandatory clauses and prohibiting any clauses that conflict with these. The reporting requirements mandate that financial statements must be prepared by a qualified accountant, include detailed financial information, and be accompanied by a statutory declaration attesting to their accuracy. Auditing requirements mandate that audits must be conducted by a qualified auditor, separate from those who prepared the financial statements, and must comply with Australian Accounting Standards. The determination does not explicitly mention any exclusions, exemptions, or thresholds. However, it extends its application through subordinate instruments by referring to the "model trust deed" and relevant professional qualifications. The Explanatory Statement indicates that the determination was developed in consultation with relevant government departments to ensure coordinated oversight of disability trust payments. The commencement date of 20 September 2006 ensures that the requirements are effective from that date, with registration occurring the following day. The determination's beneficial effect means that existing rights and liabilities of persons are not disadvantaged.

Key Provisions

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (DEST) Determination 2006 outlines specific requirements for trusts designated as Special Disability Trusts under the Social Security Act 1991. The trust deed must follow a specified "model trust deed" format (section 2.1) and include specific mandatory clauses (section 2.2) that cannot be overridden by any inconsistent clauses (section 2.3). Annual financial reports must be prepared by a qualified accountant or financial planner who is not a family member of the beneficiary or trustee (section 3.1). These reports must include a profit and loss statement, balance sheet, and relevant notes, providing a true and fair view of the trust's financial position as at 30 June each year (section 3.2). Additionally, a certified copy of the trust's income tax return and a statutory declaration affirming the accuracy of the financial statements must be submitted annually (sections 3.3 and 3.4). Trustees and trustees' corporations are obligated to adhere to these trust deed, reporting, and auditing requirements to ensure the trust's compliance with the Social Security Act 1991. Trustees must ensure that the trust deed conforms to the model trust deed, financial reports are prepared by qualified professionals, and both financial statements and statutory declarations are submitted annually. Auditors must be independent of the trust and its beneficiaries and must ensure that the trust's financial statements and compliance with the trust deed provisions are accurately reported. Breaches of these requirements may lead to civil or criminal consequences. For example, providing false or misleading information in the financial statements or statutory declarations could result in penalties under the relevant sections of the Social Security Act 1991. The exact penalties are not specified in the Determination but may include fines or other sanctions as outlined in the Act. Failure to comply with the trust deed requirements could also render the trust ineligible for the benefits associated with being a Special Disability Trust.

Area of Law: Social Security Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Reporting & Disclosure Obligations; Regulatory Standards

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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.

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