Veterans’ Entitlements (Special Disability Trust — Discretionary Spending) Determination 2018

Overview

The Veterans’ Entitlements (Special Disability Trust – Discretionary Spending) Determination 2018, enacted by the Repatriation Commission as a delegate of the Commonwealth Parliament, amends the discretionary spending limits for special disability trusts under the Veterans’ Entitlements Act 1986. This legislation addresses the need to adjust the allowable spending on discretionary items for beneficiaries of special disability trusts, ensuring they can maintain their status while providing flexibility in fund use. The purpose of this determination is to increase the discretionary spending amount from $11,750 to $12,000 for the 2018/19 financial year, reflecting changes in the Consumer Price Index. This adjustment ensures that more income of a person with a disability is excluded from income support assessment under the VEA, thereby supporting the right to social security and an adequate standard of living, as recognised in the International Covenant on Economic, Social and Cultural Rights and the Convention on the Rights of Persons with Disabilities.

Scope and Application

The Veterans’ Entitlements (Special Disability Trust – Discretionary Spending) Determination 2018 applies to special disability trusts established by family members to provide primarily for the reasonable care and accommodation needs of a family member with a severe disability. The determination sets out the maximum amount of the income and assets of such trusts that can be spent for purposes other than the primary purposes of the trust, which is to meet the reasonable care and accommodation needs of the beneficiary. The discretionary spending amount has been increased from $11,750 to $12,000 for the 2018/19 financial year, effective from 1 July 2018. This determination applies to trusts established under the Veterans’ Entitlements Act 1986 (VEA) and is a Commonwealth instrument, meaning it applies across Australia. The determination does not apply to any specific exclusions or exemptions, nor does it extend or restrict application through subordinate instruments. The Department of Social Services and the Department of Veterans’ Affairs were consulted in the course of this exercise to ensure a consistent approach to the increase of the discretionary spending amount.

Key Provisions

The Veterans’ Entitlements (Special Disability Trust – Discretionary Spending) Determination 2018 (Instrument 2018 No. R73) sets forth the maximum amount of income and assets of a special disability trust that can be spent for purposes other than the primary purposes of the trust, which are to meet the reasonable care and accommodation needs of the principal beneficiary (section 5). For the 2018/19 financial year, this maximum value has been increased to $12,000, reflecting changes in the Consumer Price Index (CPI) from the previous year’s limit of $11,750. This adjustment ensures that more income from a special disability trust can be used for the benefit of the principal beneficiary without causing the trust to lose its special status under the Veterans’ Entitlements Act 1986 (VEA). The Determination imposes obligations on the trustees of special disability trusts to ensure that the discretionary spending does not exceed the stipulated amount and that it is used appropriately for the benefit of the principal beneficiary. Trustees must also maintain records and documentation that demonstrate compliance with the provisions of the Determination. Additionally, the principal beneficiary and other relevant parties must be informed of the discretionary spending amount and any changes to it. The Determination ensures that the discretionary spending does not undermine the primary purpose of the special disability trust, which is to provide for the reasonable care and accommodation needs of the beneficiary. Any breach of the provisions of the Determination can result in civil or criminal penalties. Specifically, trustees who misuse the discretionary spending amount may face legal action, and the trust could lose its special status, leading to potential financial and administrative complications. While the Determination does not explicitly state maximum penalties, breaches of similar provisions under the VEA can lead to fines and other penalties as prescribed by law. The misuse of trust funds for unauthorised purposes could also result in criminal charges under general fraud and theft laws, with penalties including imprisonment and fines, depending on the severity of the breach. The Determination aims to balance the needs of beneficiaries with the requirements of maintaining the special status of the trust. It ensures that beneficiaries can receive additional support without compromising the primary purpose of the trust. By setting a clear limit on discretionary spending and providing guidelines for its use, the Determination supports the rights to social security and an adequate standard of living for those affected by the VEA, as recognised under international human rights conventions.