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

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

Administered by Department of Social Services

Legislation au F2006L03117 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Summary

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (FaCSIA) 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 Families, Communities and Indigenous Affairs 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 Education, Science and Training 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.

Overview

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (FaCSIA) Determination 2006 was enacted to provide clarity and structure around the administration of Special Disability Trusts under the Social Security Act 1991. This legislation was introduced to address the need for specific guidelines regarding the trust deeds, annual financial reporting, and auditing processes for Special Disability Trusts. It was made under the authority of the Department of Families, Communities and Indigenous Affairs and aims to ensure that these trusts operate transparently and in the best interest of their beneficiaries. The Determination specifies the form and provisions required for a trust deed to qualify as a Special Disability Trust, sets out requirements for the preparation and submission of annual financial reports, and outlines the criteria and standards for auditing these trusts. This legislation is intended to maintain the integrity and accountability of funds allocated to Special Disability Trusts. The determination was developed with input from various relevant departments, including the Department of Education, Science and Training, the Department of Employment and Workplace Relations, and the Department of Human Services, to ensure a coordinated approach to service delivery and compliance. As this legislative instrument is unlikely to have a significant impact on business or competition, a Regulation Impact Statement was not required. This Determination represents a structured effort to uphold the integrity and efficiency of financial management within Special Disability Trusts, ensuring they remain a reliable source of support for individuals with special needs.

Scope and Application

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (FaCSIA) Determination 2006 applies to Special Disability Trusts established under the Social Security Act 1991. These trusts are designed to provide financial support for individuals with severe disabilities, ensuring that their care and accommodation needs are met. The Determination applies to the trust deed, annual financial reports, and audits of these trusts. It is applicable nationally, extending across all jurisdictions within Australia. The Determination does not explicitly state any exclusions or exemptions, though its requirements are narrowly tailored to the specified trust structure and processes. The scope of the Determination may be extended through subordinate instruments, which can further specify the details of the trust deed, reporting, and auditing processes. The Determination provides a clear framework for ensuring that Special Disability Trusts operate transparently and in accordance with legislative requirements, safeguarding the interests of beneficiaries.

Key Provisions

The Social Security (Special Disability Trust – Trust Deed, Reporting and Audit Requirements) (FaCSIA) Determination 2006 (the Determination) outlines specific requirements for Special Disability Trusts, established under the Social Security Act 1991. Section 2.1 (Part 2, subsection 1209P(2)(a)) mandates that any trust seeking to qualify as a Special Disability Trust must adopt the "model trust deed," which is defined in section 1.3 as a booklet published by the Department of Families, Communities and Indigenous Affairs. Section 2.2 (subsection 1209P(2)(b)) lists mandatory clauses that must be included in the trust deed, and these must be in the form specified in the "model trust deed" (subsection 1209P(2)(c)). Additionally, Section 2.3 (subsection 1209P(2)(d)) prohibits the inclusion of any clauses that conflict with or override the listed mandatory clauses. The Determination imposes specific obligations on parties involved with Special Disability Trusts. Trustees must ensure that the trust adheres to the specified trust deed format and includes all mandatory clauses (section 2.2). Furthermore, financial statements must be prepared by a qualified accountant or financial planner who is not a family member of the principal beneficiary or a trustee (section 3.1). These statements must include a profit and loss statement, balance sheet, and relevant notes, and must comply with Australian Accounting Standards (section 3.2). Each year, trustees must also provide a certified copy of the trust's income tax return and a Statutory Declaration attesting to the accuracy of the submitted information (sections 3.3 and 3.4). Failure to comply with the provisions of the Determination can result in significant consequences. While specific penalties are not detailed within the Determination, non-compliance with the Social Security Act 1991 can lead to enforcement actions, fines, or other legal repercussions. For instance, Section 1209P(2) of the Act could impose penalties for incorrect or misleading information provided to the Secretary. Similarly, auditors and financial planners who fail to adhere to the outlined standards may face professional disciplinary actions from their respective professional bodies.

Area of Law: Social Security Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Licensing & Registration; Reporting & Disclosure Obligations; Auditing Requirements

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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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