Post by highlander4000 on Oct 28, 2021 16:59:17 GMT 7
Hi guys, sorry for my long absence from the forum, I've been reading but not logging in. Sorry for that.
I wanted to start this thread because of my families current circumstances and perhaps someone can offer advice and also so it can serve as information for others in the future.
So a special disability trust.. I'll call it an SDT from now on.
I only just started reading about it and I'm finding it hard to understand. So I think it's best to start with my story.
Mum and Dad just sold their house. They got alot more than expected due to its location. They have moved in to a smaller house, that is half the price of what they received for the previous house.
Mum and Dad are now both on the age pension.
I'm the only child of the four children on the DSP and I'm classified as severe.
Mum and Dad don't know much about money but they want their children to inherit as much as possible, they want is to get a quarter each once they pass away.
Because they now have all this extra money from the house sale, Mum realises that this extra money will affect their pension rate.
If they hadn't sold, the house would not have been assessed on their pension rate, but now their pension is going to reduce dramatically, possibly to zero, as Dad thinks they should put the money into superannuation. I don't know much about super, but I think you get interest, it's like investing.
So Mum's really upset and regretting her sale as she wasn't thinking straight and didn't understand about how selling the higher priced house to live in a lower priced house would result in them spending all the extra money because they won't qualify for the pension, or maybe they'll get a part pension.
She's sad because that will eat into our inheritance, so she feels guilty for this.
They can't "gift", the money to us now, as that is considered in their asset test and wouldn't result in restoring their pension.
So I was curious about how Centrelink would approach a disabled child in this situation. That's how I stumbled across the SDT.
It seems to read that you can put 500,000 into a trust for a disabled person and that this is called a concession or something. Meaning, I think, that it won't affect my DSP rate.
How do I explain this?. I guess I'm saying that way I've read it, is that when they pass away and we inherit money, that the 500,000 in the the SDT will not be classed as an asset and therefore will not affect my DSP rate.
I also seemed to read it as, Mum and Dad wouldn't be "gifting", the money by setting up a SDT, so that would be excluded from their asset test in regards to what rate of pension they will receive.
I also am not sure if an SDT gets invested by the trustee so as to accumulate, the same way superannuation can be invested.
Anyway, I'm only just reading about it, but thought it would be good to have on the forum. My uncles an accountant, mum thinks all financial advisors are out to rip her off because we also have a trust fund being handling my grandpa's trust in England and the trustees are solicitors, who she's certain are eating up the trust in soliciter fees, but that's another story.
In the SDT I imagine mum and dad would be the trustees, with my siblings taking over after their death. I also don't know if, the rules of the trust were that once they were deceased the SDT would dissolve and be available to me as a lump sum, so I could buy a house or something, or buy a house overseas, whether that dissolving would then affect my pension.
I don't have a wife or kids, but if I did, hmmm, I'm guessing owning the home in Australia would be excluded from the asset test, whereas if I bought overseas, it wouldn't be.
Sorry this is a long first post, im just trying to think about the future and what would result in the best outcome financially.
I think mum and dad should sit down with a financial advisor with my accountant uncle present, so that he can ask the questions mum and dad wouldn't know to ask and also clarify whether creating an SDT is a good idea for me and us, in the present and in the future.
I'll keep you updated on the situation.
Here are some links on SDT's.
www.dva.gov.au/financial-support/support-families/effects-special-disability-trust
Actually you will see that the link above says 700,250 dollars, whereas on other sites it says 500,000 dollars.
guides.dss.gov.au/guide-social-security-law/4/14/4/20
This link above however says 500,000 dollars.
guides.dss.gov.au/guide-social-security-law/4/14/4
guides.dss.gov.au/guide-social-security-law/4/14
I'll keep you updated, take care, peace
Highlander.
I wanted to start this thread because of my families current circumstances and perhaps someone can offer advice and also so it can serve as information for others in the future.
So a special disability trust.. I'll call it an SDT from now on.
I only just started reading about it and I'm finding it hard to understand. So I think it's best to start with my story.
Mum and Dad just sold their house. They got alot more than expected due to its location. They have moved in to a smaller house, that is half the price of what they received for the previous house.
Mum and Dad are now both on the age pension.
I'm the only child of the four children on the DSP and I'm classified as severe.
Mum and Dad don't know much about money but they want their children to inherit as much as possible, they want is to get a quarter each once they pass away.
Because they now have all this extra money from the house sale, Mum realises that this extra money will affect their pension rate.
If they hadn't sold, the house would not have been assessed on their pension rate, but now their pension is going to reduce dramatically, possibly to zero, as Dad thinks they should put the money into superannuation. I don't know much about super, but I think you get interest, it's like investing.
So Mum's really upset and regretting her sale as she wasn't thinking straight and didn't understand about how selling the higher priced house to live in a lower priced house would result in them spending all the extra money because they won't qualify for the pension, or maybe they'll get a part pension.
She's sad because that will eat into our inheritance, so she feels guilty for this.
They can't "gift", the money to us now, as that is considered in their asset test and wouldn't result in restoring their pension.
So I was curious about how Centrelink would approach a disabled child in this situation. That's how I stumbled across the SDT.
It seems to read that you can put 500,000 into a trust for a disabled person and that this is called a concession or something. Meaning, I think, that it won't affect my DSP rate.
How do I explain this?. I guess I'm saying that way I've read it, is that when they pass away and we inherit money, that the 500,000 in the the SDT will not be classed as an asset and therefore will not affect my DSP rate.
I also seemed to read it as, Mum and Dad wouldn't be "gifting", the money by setting up a SDT, so that would be excluded from their asset test in regards to what rate of pension they will receive.
I also am not sure if an SDT gets invested by the trustee so as to accumulate, the same way superannuation can be invested.
Anyway, I'm only just reading about it, but thought it would be good to have on the forum. My uncles an accountant, mum thinks all financial advisors are out to rip her off because we also have a trust fund being handling my grandpa's trust in England and the trustees are solicitors, who she's certain are eating up the trust in soliciter fees, but that's another story.
In the SDT I imagine mum and dad would be the trustees, with my siblings taking over after their death. I also don't know if, the rules of the trust were that once they were deceased the SDT would dissolve and be available to me as a lump sum, so I could buy a house or something, or buy a house overseas, whether that dissolving would then affect my pension.
I don't have a wife or kids, but if I did, hmmm, I'm guessing owning the home in Australia would be excluded from the asset test, whereas if I bought overseas, it wouldn't be.
Sorry this is a long first post, im just trying to think about the future and what would result in the best outcome financially.
I think mum and dad should sit down with a financial advisor with my accountant uncle present, so that he can ask the questions mum and dad wouldn't know to ask and also clarify whether creating an SDT is a good idea for me and us, in the present and in the future.
I'll keep you updated on the situation.
Here are some links on SDT's.
www.dva.gov.au/financial-support/support-families/effects-special-disability-trust
Actually you will see that the link above says 700,250 dollars, whereas on other sites it says 500,000 dollars.
guides.dss.gov.au/guide-social-security-law/4/14/4/20
This link above however says 500,000 dollars.
guides.dss.gov.au/guide-social-security-law/4/14/4
guides.dss.gov.au/guide-social-security-law/4/14
I'll keep you updated, take care, peace
Highlander.