Special Disability Trusts · HFI Guidance
A Special Disability Trust carries significant Centrelink and tax concessions — but not everyone qualifies as a beneficiary. The eligibility criteria are specific and a diagnosis alone is not enough. This guide explains who qualifies and what to check.
By Health & Finance Integrated · Updated 2 June 2026 · General information only
The short version
Special Disability Trust eligibility requires a person to have a severe disability as defined under the Social Security Act 1991. The law sets out specific medical and functional criteria. A diagnosis alone is not enough — the criteria focus on what the person can and cannot do, not only what condition they have.
There are two separate tests: one for people aged 16 and over, and one for children under 16. Meeting the criteria on paper is one step. DSS must also formally confirm that the prospective beneficiary qualifies as severely disabled before the trust is established.
Adults aged 16 and over
An adult aged 16 or over must satisfy all three of the following conditions at the same time. Meeting one or two is not enough.
All three must be met at the same time
All three conditions must be satisfied simultaneously. A person who meets conditions 1 and 2 but works part-time above seven hours per week does not qualify.
No. A person does not need to be receiving the Disability Support Pension to qualify as an SDT beneficiary. They only need to meet the DSP impairment threshold.
This matters because some clients are ineligible for DSP due to income or assets, are serving a Centrelink compensation preclusion period, or have transferred to the Age Pension. All of these people may still qualify as SDT beneficiaries if they meet the underlying medical criteria.
Applies to adults aged 16 or over living in supported accommodation
Children under 16
A different test applies for children under the age of 16. The parent’s own assessment of care needs is not sufficient — formal assessment processes must be completed.
All three conditions must be met
The Disability Care Load Assessment must be formally completed and result in an ‘intense’ rating. A parent’s subjective view of care needs does not satisfy this criterion.
The Disability Care Load Assessment (Child) Determination 2020 rating must be obtained before or as part of establishing the trust. If the rating has not yet been completed, or if the most recent assessment did not result in an ‘intense’ rating, the child will not currently qualify — regardless of how complex the care needs are in practice.
Where eligibility needs closer examination
Special Disability Trust eligibility is sometimes assumed based on a diagnosis or existing Centrelink classification alone. These situations often need closer examination.
The seven-hour-per-week work threshold still applies. A person working part-time above seven hours at minimum wage may not meet the criteria, regardless of their DSP status. Being on DSP is evidence of meeting the impairment threshold, but it does not satisfy all three adult criteria on its own.
Eligibility depends on whether the impairment meets the DSP impairment threshold and whether a carer would qualify for Carer Payment or Allowance. Some mental health conditions qualify. Others do not, despite being serious. This requires assessment against the specific criteria rather than assumption based on diagnosis.
The parent’s assessment of care needs is not sufficient. The formal Disability Care Load Assessment under the 2020 Determination must be completed, and must result in an ‘intense’ rating. If it has not been done, or if the most recent assessment did not reach that level, the child will not currently qualify.
The Centrelink compensation preclusion period does not affect SDT eligibility. A person receiving a compensation payment may still qualify as an SDT beneficiary if they meet the underlying disability criteria. Compensation proceeds raise separate contribution, gifting, Centrelink and trust-property considerations. Do not assume compensation funds can be contributed to an SDT without advice. This should be reviewed with a specialist before any transfer is made.
Once eligibility is established
Confirming eligibility is the first step. Before relying on SDT concessions, the prospective beneficiary’s eligibility should be confirmed with Services Australia, DSS or DVA as relevant. In practice, it is sensible to confirm eligibility before incurring legal costs or signing a trust deed, because establishing a trust first carries the risk that the structure does not qualify for concessional treatment.
Once eligibility is confirmed, there are several further questions that shape whether and how an SDT is established. These are the questions HFI works through with families, lawyers, accountants and allied health professionals.
At least two individual trustees are required, or a professional trustee. Succession arrangements need to be in place for when a trustee can no longer act — this is one of the most commonly overlooked issues in SDT planning.
Identifying which assets will be contributed, by whom, and in what order. The gifting concessions available to eligible family members need to be coordinated with the contribution plan.
How the trust’s permitted expenditure rules interact with the beneficiary’s actual care and accommodation needs — including which costs are covered and how to document expenditure correctly for annual reporting.
How the SDT fits with the broader estate plan, including the will and superannuation death benefit nominations. Superannuation death benefits can be contributed to an SDT within three years of receipt by the principal beneficiary or their partner.
The Centrelink implications for eligible family members making gifts to the trust, including the concessional gifting rules and what happens if those limits are exceeded.
Understanding the ongoing compliance obligations, including annual financial statements to DSS, the investment strategy requirement, and what happens if the trust does not meet its obligations.
Once eligibility is confirmed and the trust is established, the trustee’s ongoing obligations need to be understood before the first payment is made. See our detailed guide to managing a Special Disability Trust as trustee.
Frequently asked questions
Key references
HFI works with families and with the lawyers, accountants and allied health professionals who support them. We can help assess eligibility, structure the trust correctly, and integrate it with the broader financial plan.
General information only. The eligibility criteria described on this page are based on the Social Security Act 1991 (Cth) and DSS administrative guidance current at the date of publication. Outcomes depend on individual circumstances. Legislative thresholds are indexed and change annually. This content does not constitute financial, legal or taxation advice. Seek professional advice before establishing a Special Disability Trust or making decisions based on this information.
Health & Finance Integrated is a Corporate Authorised Representative of Able Financial Services (ABN 27 646 319 164) AFSL 530596. Shop 6, 23 Hassall St, Parramatta NSW 2150. Any advice in this website is general in nature and has been prepared without considering your objectives, financial situation or needs.